Adsense is an ad serving application run by Google Inc. Website owners can enroll in this program to enable text, image, and video advertisements on their websites. These advertisements are administered by Google and generate revenue on either a per-click or per-impression basis. Google beta tested a cost-per-action service, but discontinued it in October 2008 in favor of a DoubleClick offering (also owned by Google). In Q1 2010, Google earned US$2.04 billion ($8.16 billion annualized), or 30% of total revenue, through AdSense.

Google uses its Internet search technology to serve advertisements based on website content, the user's geographical location, and other factors. Those wanting to advertise with Google's targeted advertisement system may enroll through AdWords. AdSense has become a popular method of placing advertising on a website because the advertisements are less intrusive than most banners, and the content of the advertisements is often relevant to the website.

Many websites use AdSense to monetize their content; it is the most popular advertising network. AdSense has been particularly important for delivering advertising revenue to small websites that do not have the resources for developing advertising sales programs and sales people. To fill a website with advertisements that are relevant to the topics discussed, webmasters implement a brief script on the websites' pages. Websites that are content-rich have been very successful with this advertising program, as noted in a number of publisher case studies on the AdSense website.

Some webmasters invest significant effort into maximizing their own AdSense income. They do this in three ways:[citation needed]

1. They use a wide range of traffic-generating techniques, including but not limited to online advertising.

2. They build valuable content on their websites that attracts AdSense advertisements, which pay out the most when they are clicked.

3. They use text content on their websites that encourages visitors to click on advertisements. Note that Google prohibits webmasters from using phrases like "Click on my AdSense ads" to increase click rates. The phrases accepted are "Sponsored Links" and "Advertisements".

The source of all AdSense income is the AdWords program, which in turn has a complex pricing model based on a Vickrey second price auction. AdSense commands an advertiser to submit a sealed bid (i.e., a bid not observable by competitors). Additionally, for any given click received, advertisers only pay one bid increment above the second-highest bid. Google currently shares 68% of revenues generated by AdSense with content network partners.

Oingo, Inc., a privately held company located in Los Angeles, was started in 1998 by Gilad Elbaz and Adam Weissman. Oingo developed a proprietary search algorithm that was based on word meanings and built upon an underlying lexicon called WordNet, which was developed over the previous 15 years by researchers at Princeton University, led by George Miller.

Oingo changed its name to Applied Semantics (company) in 2001,which was later acquired by Google in April 2003 for US$102 million.

In 2009, Google AdSense announced that it would now be offering new features, including the ability to "enable multiple networks to display ads".

AdSense for Feeds

In May 2005, Google announced a limited-participation beta version of AdSense for Feeds, a version of AdSense that runs on RSS and Atom feeds that have more than 100 active subscribers. According to the Official Google Blog, "advertisers have their ads placed in the most appropriate feed articles; publishers are paid for their original content; readers see relevant advertising—and in the long run, more quality feeds to choose from."

AdSense for Feeds works by inserting images into a feed. When the image is displayed by a RSS reader or Web browser, Google writes the advertising content into the image that it returns. The advertisement content is chosen based on the content of the feed surrounding the image. When the user clicks the image, he or she is redirected to the advertiser's website in the same way as regular AdSense advertisements.

AdSense for Feeds remained in its beta state until August 15, 2008, when it became available to all AdSense users.

AdSense for search

A companion to the regular AdSense program, AdSense for search, allows website owners to place Google search boxes on their websites. When a user searches the Internet or the website with the search box, Google shares 51% of the advertising revenue it makes from those searches with the website owner.[5] However the publisher is paid only if the advertisements on the page are clicked; AdSense does not pay publishers for mere searches.

AdSense for mobile content

AdSense for mobile content allows publishers to generate earnings from their mobile websites using targeted Google advertisements. Just like AdSense for content, Google matches advertisements to the content of a website — in this case, a mobile website.

AdSense for domains

Adsense for domains allows advertisements to be placed on domain names that have not been developed. This offers domain name owners a way to monetize domain names that are otherwise dormant. Adsense for domains is currently being offered to some users, with plans to make it available to all in stages.

On December 12, 2008, TechCrunch reported that AdSense for Domains is available for all US publishers.

AdSense for video

AdSense for video allows publishers with video content to generate revenue using ad placements from Google's extensive Advertising network including popular Youtube videos.

Source : http://en.wikipedia.org/wiki/Adsense