Still think newspapers didn't see the Internet coming - or were scared to experiment with electrons? Check out this KRON report from 1981* showing the San Francisco Chronicle and nine other newspapers testing a rudimentary Internet system.
The video is more evidence that newspapers, for all their faults, didn't miss the significance of going online, they misunderstood (as most of us did) how the Internet would alter the economic landscape. Consider the assessment David Cole offers for what the electronic newspaper would mean for the Chronicle: "We're not in it to make money" he says, adding "we're probably not going to lose a lot."
Exactly the wrong instincts on both points.
(*Also in 1981: Ronald Reagan became president, Rupert Murdoch bought the Times of London, MTV was launched)