There is still a role for newspapers, and they can thrive online by filling that role. What they have to do is to cut their costs dramatically -- probably by 95% or more -- by stopping doing everything that someone else, anywhere in the world, is doing better. Why would I want to read the Guardian's coverage of the US elections when there's fivethirtyeight.com? Why would I want to read the Times's technology column when there's ArsTechnica? Why are newspapers still paying journalists to lightly rehash press releases that they don't even understand (of which I have lots of personal experience from looking at the generally appalling house price journalism in the UK)? I don't need a newspaper to compile the news for me any more; I have an RSS reader.
So, my advice to newspapers, and to journalists, is to specialise. Journalists have to do a 180° turn -- it used to be that a good journalist was one who could write shallowly about anything; now a good journalist is one who can write in depth about one topic better than anyone else in the world. Identify what content you have that's better than anyone else, and keep it; ditch the rest. Your advertising revenues should then seem quite reasonable. If you can still make money by printing a generalist publication on paper, then stick with it, but don't expect the Internet to work the same way, and don't destroy your Internet presence to try to save your old business model. We will end up with a lot fewer journalists doing a much better job.