Google AdSense has rapidly gained a status of an independent online business model. Many average people with a little knowledge of HTML are earning a fortune with AdSense.
The AdSense comes under category of "pay per click affiliate" programs. This means you get paid when someone click on ad which resides on your website.
There are many reason for success of AdSense program. The very first reason is it is launched by Google, leaders of Search Engines. After establishing themselves in crowd of Search Engines they had a crown of credibility with them.
The second reason for popularity lies in fact that Google is not concerned about amount of traffic you are getting to your website.
They are more concerned about content. If content is really good your site will generate visitors over a period of time. This is unlike many other pay per click affiliate programs, which have a condition on number of visitors you are getting per day, before your application gets approved.
This creates an interesting situation for online entrepreneurs. The more traffic they generate to their site, more is possibility to get AdSense ad clicked and they get paid.
Now Google also benefits from this. Since AdSense ads are nothing but same ads from Google AdWords account holders, Google charges AdWords account holder of that particular ad which is being clicked and pays a small portion to webmaster on whose website AdSense ad resides.
The amount which Google charges AdWords account holder and pays AdSense account holder is determined entirely by online popularity of given "keyword" for which ad was written by AdWords account holder.