Let me start with explaining what Google AdWords are. Google offers website owners a way of paying for traffic. These paid ads are called AdWords and are located on the left side of a Google search page and sometimes at the top of the search results. Advertisers bid on how much they are willing to pay each time a searcher clicks their ad. Advertisers can also opt to allow their ads to be shown on the “content network”. This network is composed of all the website owners who sign up for the Google AdSense program.

Are you confused yet?
Stay with me here.

If you are a new website owner and sign up to make money with Google AdSense, Google will place ads from Google AdWords’ advertisers onto your site. Google is smart. If your site is about dog collars, Google will only place dog related ads on your site. This takes no work from you other than pasting some simple code onto your page one time. Google will then look at the content of your page and place the appropriate AdSense ads onto your site. Even if the content of the page changes in the future, Google will adjust the ads to match the content.

Oh, by the way, be sure to read: Common Internet marketing mistakes beginners make.

The Cool Part:
You Can Make Money with Google AdSense

Google will charge the advertisers each time a visitor clicks on the ad. Since you were so nice to allow Google to place the ad on your site, Google will pay you a part of what the advertiser paid for the click. This amount varies depending upon the area and the quality of traffic your site attracts. From my experience the clicks range in value to me from $.01 to several dollars. Some areas pay even more. In order to make money with Google AdSense a site needs quality content and traffic.

Content is Key

Clicks for ads related to ring tones, joke sites, music sites, etc. will pay very little. Clicks on ads for such things as high-dollar products, insurance, home loans, legal advice, etc. will pay much more. Therefore, if you have a funny video site, don’t expect much money unless you have a LOT of traffic. On the other hand, your how-to-buy-a-home information website may very well prove to be a great way to make money with Google AdSense. That type of content will attract high-paying clicks related to mortgages and home insurance.

Tips on How to Make Money with Google AdSense

• Don’t Put AdSense onto a site until it is getting at least some traffic from the search engines already. (I also advise this with respect to affiliate marketing ads.)
• Read the AdSense terms of service carefully! Don’t get your account banned due to ignorance!
• Don’t fall for the “AdSense Arbitrage” scheme! Used to you could drive traffic to a site with AdSense on it by using AdWords ads and come out ahead. Not anymore. Google put a stop to that kind of spamming. It simply does not work now. Be sure to read here about methods and online scams which don't work either.
• Content is king with AdSense. Plenty of great content optimized for a niche keyword will determine how much or how little your site makes in Adsense income.

Simply put, it really is possible to make money with Google AdSense. I personally would not count on making it my primary business focus, but it is a great way to create one area of income each month.