AdSense is an advertisement application run by Google. Website owners can enroll in this program to enable text, image, and more recently, 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).
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. 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:
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.
The underlying technology behind AdSense was derived originally from WordNet, Simpli (a company started by the founder of Wordnet, George A. Miller), and a number of professors and graduate students from Brown University, including James A. Anderson, Jeff Stibel, and Steve Reiss. A variation of this technology utilizing WordNet was developed by Oingo, a small search engine company based in Santa Monica founded in 1998 by Gilad Elbaz and Adam Weissman. Oingo changed its name to Applied Semantics in 2001, which was later acquired by Google in April 2003 for US$102 million.
 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 any advertising revenue it makes from those searches with the website owner. 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.
 XHTML compatibility
As of September 2007, the HTML code for the AdSense search box does not validate as XHTML, and does not follow modern principles of website design because of its use of
* non-standard end tags, such as and ,
* the attribute checked rather than checked="checked",
* presentational attributes other than id, class, or style — for example, bgcolor and align,
* a table structure for purely presentational (i.e., non-tabular) purposes,1 and
* the font tag.2
1: using a table structure for unintended purposes is strongly recommended against by the W3C, but nevertheless does not cause a document to fail validation — there is currently no algorithmic method of determining whether a table is used "correctly" (for displaying tabular data or for displaying elements, that get proportionally wider or narrower when browser window resizes in width without active client side scripting).
2: the font tag is deprecated but does not fail validation in any XHTML standard.
The terms of the AdSense program forbid its affiliates from modifying the code, thus preventing these participants from having valid XHTML websites.
However, a workaround has been found by creating a separate HTML webpage containing only the AdSense advertisement units, and then importing this page into an XHTML webpage with an object tag. This workaround appears to be accepted by Google.
 How AdSense works
* For contextual advertisements, Google's servers use a cache of the page to determine a set of high-value keywords. If keywords have been cached already, advertisements are served for those keywords based on the AdWords bidding system. (More details are described in the AdSense patent.)
* For site-targeted advertisements, the advertiser chooses the page(s) on which to display advertisements, and pays based on cost per mille (CPM), or the price advertisers choose to pay for every thousand advertisements displayed. 
* For referrals, Google adds money to the advertiser's account when visitors either download the referred software or subscribe to the referred service. The referral program was retired in August 2008.
* Search advertisements are added to the list of results after the visitor performs a search.
Some webmasters create websites tailored to lure searchers from Google and other engines onto their AdSense website to make money from clicks. These "zombie" websites often contain nothing but a large amount of interconnected, automated content (e.g., a directory with content from the Open Directory Project, or scraper websites relying on RSS feeds for content). Possibly the most popular form of such "AdSense farms" are splogs (spam blogs), which are centered around known high-paying keywords. Many of these websites use content from other websites, such as Wikipedia, to attract visitors. These and related approaches are considered to be search engine spam and can be reported to Google.
A Made for AdSense (MFA) website or webpage has little or no content, but is filled with advertisements so that users have no choice but to click on advertisements. Such pages were tolerated in the past, but due to complaints, Google now disables such accounts.
There have also been reports of Trojan horses engineered to produce counterfeit Google advertisements that are formatted looking like legitimate ones. The Trojan downloads itself onto an unsuspecting computer through a webpage and then replaces the original advertisements with its own set of malicious advertisements.
Due to concerns about click fraud, 'Google AdSense' has been criticized by some search engine optimization firms as a large source of what Google calls "invalid clicks", in which one company clicks on a rival's search engine advertisements to drive up the other company's costs.
To help prevent click fraud, AdSense publishers can choose from a number of click-tracking programs. These programs display detailed information about the visitors who click on the AdSense advertisements. Publishers can use this to determine whether or not they have been a victim of click fraud. There are a number of commercial tracking scripts available for purchase.
The payment terms for webmasters have also been criticized. Google withholds payment until an account reaches US$100, but many micro content providers require a long time—years in some cases—to build up this much AdSense revenue. However, Google will pay all earned revenue greater than US$10 when an AdSense account is closed.
Google came under fire when the official Google AdSense Blog showcased the French video website Imineo.com. This website violated Google's AdSense Program Policies by displaying AdSense alongside sexually explicit material. Typically, websites displaying AdSense have been banned from showing such content. Some sites have been banned for distributing copyright material even when they hold the copyright themselves or are authorised by the copyright holder to distribute the material.
It has been reported that using both AdSense and AdWords may cause a website to pay Google a commission when the website advertises itself.
Article From : Wikipedia