Google AdSense is a free system for generating passive income from advertising revenue on the Web. When signing up for AdSense, you choose from different programs that place ads for products and services relating to your website's content. Advertisers pay a fee directly to Google for these ads, who then pays you a portion of that fee. The AdSense programs vary by how Google delivers the ad content to your site.
All Programs
For all the AdSense programs, you can choose where the ad content appears on your site. You also have some influence in choosing what content Google will display on your site. You can filter out the ads from sites that compete with yours, or ads that don't relate to your site's content or that are offensive.
Eligibility
Before you can choose parameters for the AdSense ads, your site has to meet Google's criteria. These include the following: You must be at least 18 and have a website. If you don't have a site, you can use a blogging site such as Blogger, WordPress or TypePad.
AdSense for Content
The AdSense for content program places ads on your site that are relevant to your site's content. For example, if your site is about notable painters throughout the history of art, you can choose to have Google show ads for people promoting products like artist supplies, picture frames, online art lessons, and other goods or services related to art. When you sign up for this AdSense program, Google presents a series of screens that let you choose how ad content will appear. For example, you can choose text-only ads to prevent large images from distracting your site's visitors. You can also choose ad size and font to integrate the ad's look with that of your site. After completing these option screens, Google gives you the HTML code to place on your site's pages. After installing this code and uploading the page to your server, Google starts delivering the ads.
AdSense for Search
Googles AdSense for search program gives you another benefit besides ad revenue: a search engine for your site. In the configuration screens for this AdSense program, you tell Google where on your site you want to place the search engine. You can also indicate which specific pages of your site you want searched. When your site's visitors use the search engine to locate content on your site, ads appear at the top of the search results--just as they do when you use the regular Google search engine.
Source - eHow
