AdSense was launched in March 2003.  Check out their Press Release.

There's no simple answer (yet).  Google doesn't disclose what fraction of click thru revenues it pays to AdSense participants and then there are all the other factors: site traffic, keyword values, click thru rates and so on.  If you really want to know how to improve have a look at Optimising Strategies. 

No. Google lays down some fairly specific policies that must be adhered to before a site can be accepted on the AdSense program and then there are other less clearly defined criteria that must be satisfied.  You also need to generate a wonderfully under-whelming 2 clicks per month from your site.

A lot and a little and the terminology takes a bit of getting used to.  (And what's the singular of AdWords too for that matter?!).  AdWords is Google's proprietary advertising service that produces those prim text-only ads on the right hand side of its search results page.  All revenues from AdWords ads that show on Google go to Google.

AdSense is Google's syndication program for its AdWords ads.  Any AdWords ads that are syndicated out to third party website do so via Google's AdSense program.  Ads seen via the AdSense program are AdWords ads posted on third party sites.

So AdWords are the ads.  AdSense is the syndication program.

Any online syndicated ad service to a degree is a competitor but the closest we know of in function are Sprinks, a divison of PRIMEDIA and Content Match (Overture).  However, on 24th October 2003 Google acquired Sprinks - they posted support information for Sprinks users.

More details about Content Match

They won't say at the moment.  People monitoring their own AdWords and AdSense statistics are trying to pin it down but it makes sense for Google to keep it quite generous because the web rumour mill would quickly start churning out bad karma if anyone seriously sensed the payments were miserly.

Google has always wanted to make money - it is a business after all largely owned by Venture Capitalists.  But Google's fundamental philosophy has been about helping people find the information they want on the web without cluttering up the process with a bazillion ads that flashed and blinked everywhere.  So they started off developing AdWords on the basis that they were discrete, text-only and RELEVANT to the searcher.  You rarely see AdWords ads that are of no relevance to you - partly because any vaguely smart advertiser won't want to waste time targeting unlikely customer bases, and more significantly, because web users can effectively vote off irrelevant ads: an AdWords ad that fails to get a decent click thru rate (0.5%) gets shoved into hibernation by Google.

AdWords thus enabled Google to make money whilst remaining largely faithful to their philosophy - ads were small and useful and relevant.  So then they began to think about expanding the program to third party sites, sites that in many cases were already using Google as a search tool.  It made sense to do this because it increased Google's revenues without detracting from the user experience.  Initially Google worked with major partner sites and once this all worked fine, they broadened out the program to AdSense - to exploit the commercial opportunities created by their excellent search technology.

It's good and the reason is that it will encourage many smaller information rich sites to grow and provide even more valuable and interesting content for web users.  In the past many really interesting sites have been posted by topic enthusiasts and the process has cost them money, particularly in the early days when domain names were expensive and so was hosting.  Even now though, to post and host a decent website takes cash and it certainly takes time.  So these enthusiasts were typing away with no reward save for a growing guest book and increasing site traffic (or not!).  AdSense empowers many of these sites to make a bit of money and recover their costs or even make a profit.  And there's a loose sort of equation too - more interesting and valuable content = more AdSense payouts.

Therefore whether you like the idea of making money from your site or of getting excellent informational resources online, AdSense is good.

No.  There are three hurdles that have to be gotten over.  First, the advertiser has to agree to content targeted ads when he sets up his AdWords campaign.  Secondly, the Google editorial team must find the ad acceptable for inclusion in AdSense.  Thirdly, the ad mustn't be from a site specifically disallowed by the AdSense participant.

On this third point, AdSense participants can prohibit ads from competitors whose website will almost certainly be similar in content to their own.

The easiest way for AdWords advertisers is to use their AdWords control panel to enter keywords into the keyword selection tool with a trial price and see what ad position Google reports back on the estimate page.  An alternative route is to enter the keyword (or phrase) into Google and see how many AdWords ads show up.  If there are fewer than 8, the bottom one costs 5c although the price paid for higher positions may be well in excess of this.  Google states that the highest price for a keyword is set at $50!

You can find a relative value by visiting FindWhat.com.  This is a useful tool if you want to plan which keywords to slant your site content towards (although FindWhat doesn't have anything like the market penetration of Google and so may not report useful data on obscure keywords and its price won't be the same as Google's.)

No.

There are some rumours going around that becoming an AdSense participant can help your site in the ranking but nothing definite has been proved yet.

Absolutely.  If you think of Google at least partly as a philanthropic organisation, then AdSense will help enthusiasts get some rewards for their labours.  All that high quality content you post could help you get some money provided there is some commercial relevance to your sites content - and there usually is.

Yes there is.  You need to get at least two clicks a month.

They don't tell you their techniques - but you can be sure as hell that they are pretty clever about this.  Think about their position.  AdWords / AdSense is a major source of revenue for Google and growing fast.  They don't want to kill this income stream off by turning advertisers off do they?  No, so they will be working very hard on this one.  If you are an AdSense participant, you'd be crazy to do it.  Google even goes so far as to state that you can't test an ad on your site even once!

Sign up to our newsletter.

Most people work backwards: they have a site and then think about monetizing it with AdSense and this is Google's preferred route.

However, a more rational approach would be as follows: