What is AdSense

Here wikipedia describes about AdSense:

AdSense is an advertisement serving program run by Google. Website owners can enroll in this program to enable text, image, and more recently, video on their websites. These advertisements are administered by Google and generate revenue on either a per-click or per-impression basis. Google is also currently beta-testing a cost-per-action based service.
Here is what Google writes about it's AdSense program:
"Google AdSense is the programme that can generate advertising revenue from each page on your website—with a minimal investment in time and no additional resources.

AdSense delivers relevant ads that are precisely targeted on a page-by-page basisto the content people find on your site. And when you add a Google search box to your site, AdSense delivers relevant ads that are targeted to the Google search results pages generated by your visitors’ search request.

You can customise the appearance of ads, choosing from a wide range of colours and templates. You can do the same with your search results page. Your reports are customisable, too. Flexible reporting tools let you group your pages in any way you want so you can view your results by URL, domain, ad type, category and more to learn where your earnings are coming from."
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 salespeople. 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 copy 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".