AdSense is an advertisement application run by Google. Once you have your website up and running, you can enroll in this program to enable text, image, and more recently, video advertisements on your website. These advertisements are administered by Google and generate revenue on either a per-click or per-impression basis. Google is also currently beta-testing a cost-per-action based service.
AdSense Basics
Insert the AdSense JavaScript code into a webpage.
Generate money based on impressions or click throughs.
Abuse of adsense is not tolerated and google will not hesitate in deleting your adsense account and refusing to pay out any money you may have accumulated.
Because the JavaScript is sent to the Web browser when the page is requested, it is possible for other website owners to copy the JavaScript code into their own webpages. To protect against this type of fraud, AdSense customers can specify the pages on which advertisements should be shown. AdSense then ignores clicks from pages other than those specified.
Should you not want to use google’s services, there are competing companies out there that offer differing services.
Live Search Cashback is a service that allow users to search for products from multiple vendors and find their prices and offering money back for purchases made through the site. It is part of Microsoft's Live Search group of services.
Yahoo also offer some form of cost per click advertising.
It is possible to make money from AdSense but you have to have a website that generates enough traffic for there to be enough click throughs to actually make any decent money. If you are running a large forum or community website, AdSense can generate some money to help pay for the hosting costs.