Why do I think this?  Because at one time they owned LinkExchange, which was the original “text ad” broker on the Internet.

When I was in the Unbridled optimism stage in 1998 there were a few options for online advertising; one of which was LinkExchange.  Here's a screenshot courtesy of the waybackmachine 

Here’s how they described themselves:
Now serving over 100 million banner ads a month on our network of over 75,000 active member sites!  As mentioned in PCWorld, Home Office Computing, SunWorld Online, and the San Francisco Chronicle! 

I actually received a few small $25 cheques from this group, after about 6 months of showing text ads. They eventually got bought by Microsoft who then weirdly repurposed the site as a resource for business owners. I think at the time click fraud was rampant and there were simply no software controls to handle it. So while google currently has the lead, the idea that selling text ads on websites is somehow new is misleading.

Now the main player is of course google, and they seem to have the market pretty well sown up at this point.  Combine the reach of their search offering and combine the network of websites showing their ads and you have a formidable competitor who has made some unlikely, some would say "non-Evil" moves to outflank the competition.

Making Money with Google AdSense

It's not hard to be accepted into google's pay per click programs, as long as you have quality content and adhere to the terms and conditions.

These types of programs usually have a higher standard or barrier to entry since the ad broker is actually on the hook for any clicks that are generated by your viewers and therefore must be very concerned about click fraud or people inflating their numbers artificially. You also require genuine traffic and content people are willing to view or looking for; not just a personal page with ads for Amazon and Magazine subscriptions to be approved; since what type of traffic can they expect from a personal page?  Remember, their job is to deliver qualified eyeballs to advertisers and there is a cost to account maintenance so a trickle of pageviews is typically not worth the trouble.

How much can you make?  It really depends on your traffic and can be influenced by your ad placement.  But everyone is looking for that one viral website that takes off and makes a mint.  Otherwise you would not be reading this article, now would you ????

Contextual Advertising

You have probably heard that google is the leader in this field.  So what exactly is Contextual Advertising?  This is a type of advertising, seemingly perfected by google that “serves” the perfect ad for the content displayed on the page.

For example:  If you were visiting a Senior Citizen page you would expect to see ads for local care facilities and medical aids, not ads for Kindergarten or High School rings and jackets.

It seems relatively straightforward, until you consider that in practice many pages are created "on-the-fly" from a database result.  It's very difficult in practice, and developers would use a number of things to try and serve the perfect ad for the perfect page.  

Why is this so important?  If you are successful your ad makes someone click through and buy something.  It's the most measurable form of cost per sale imaginable and is the new reality in today's cut-throat world of hard results.  No sales, no job for you...So the ad better be right. 

For you as the webmaster the integration is seamless, you log in; copy and paste one piece of code, say on a shared left border.  As each page is shown, so are relevant ads.

For the search engine, the integration must be hellish.  That page may have 40 different subjects and keywords, how to decide which ad to show? 

I imagine they have a few ways of doing this, all of which would be incredibly tricky, involve cookies, databases and lots more.

Other Ways of getting paid:  Using pay-per-action ads