I don't think internet advertising ever has actually funded that much news. For the 1990s and 2000s, non-subscription news on the web was mostly cross-subsidized by print subscriptions. Taken purely as an online operation, sites like wsj.com and nytimes.com didn't make nearly enough money from ads to pay for the cost of their reporting.

It's only recently that newspapers seem to be trying to make the online business actually fund the reporting, and the NYTimes, at least, is going back to a quasi-subscription model to try to make that work.

Now there are some sites that are purely ad-supported, but imo most of them don't produce particularly high-quality news. Stuff like, say, TechCrunch or Gawker.