AdSense is an ad serving program run by Google. Website owners can enroll in this program to enable text, image and, more recently, video advertisements on their sites. These ads are administered by Google and generate revenue on either a per-click or per-thousand-impressions basis. Google is also currently beta-testing a cost-per-action based service.

Google utilizes its search technology to serve ads based on website content, the user’s geographical location, and other factors. Those wanting to advertise with Google’s targeted ad system may sign up through AdWords. AdSense has become a popular method of placing advertising on a website because the ads are less intrusive than most banners, and the content of the ads is often relevant to the website. Source: wikipedia

Adsense took the world by storm when it came on the scene and allows webmasters a simple and effective way of monetizing their website. Whilst there has been much criticism over google adsense particularily in the issue of clickfraud - adsense still remains the primary way for webmasters to monetize their sites.