A snippet from Wikipedia
The term "hyperlink" was coined in 1965 (or possibly 1964) by Ted Nelson at the start of Project Xanadu. Nelson had been inspired by "As We May Think", a popular 1945 essay by Vannevar Bush. In the essay, Bush described a microfilm-based machine (the Memex) in which one could link any two pages of information into a "trail" of related information, and then scroll back and forth among pages in a trail as if they were on a single microfilm reel.
In a series of books and articles published from 1964 through 1980, Nelson transposed Bush's concept of automated cross-referencing into the computer context, made it applicable to specific text strings rather than whole pages, generalized it from a local desk-sized machine to a theoretical proprietary worldwide computer network, and advocated the creation of such a network. Though Nelson's Xanadu Corporation was eventually funded by Autodesk in the 1980s, it never created this proprietary public-access network. Meanwhile, working independently, a team led by Douglas Engelbart (with Jeff Rulifson as chief programmer) was the first to implement the hyperlink concept for scrolling within a single document (1966), and soon after for connecting between paragraphs within separate documents (1968), with NLS. Ben Shneiderman working with graduate student Dan Ostroff designed and implemented the highlighted link in the HyperTIES system in 1983. HyperTIES was used to produce the world's first electronic journal, the July 1988 Communications of ACM, which was cited as the source for the link concept in Tim Berners-Lee's Spring 1989 manifesto for the Web. In 1988, Ben Shneiderman and Greg Kearsley used HyperTIES to publish "Hypertext Hands-On!", the world's first electronic book.