Google adsense is a shared advertising service owned by Google, where People Pay to Promote a Product to Google where people search i.e. whatever they are searching, they get to see the payed advertisement which has to relate to what you search and if a person clicks on that link then the advertiser pays for click.
So where does Google adsense come into this,well when a person clicks on a advert link on google,the person pays,and that pay goes to google,but with Google adsense and if you get accepted you get some html code of google to put on your website/blog,and if a person clicks on that,that person gets a share of the payed click,And that is how Google adsense works, bit like money growing on trees,
However Google has terms and conditions that can change at any minute so you would have to check daily to see whats not and what is,people use google adsense and google adwords as a liveing,and there are Marketing books around on the internet which goes on about this.
So thats a Brief Comment about some of Google's Money machine
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