K had asked in the comments to enlighten him about the mysterious ways of Adsense. Since I have been thinking for a while about the possibility of earning a bit of spare change by running a blog or a website I figured that I might as well flesh out a little bit on how it could be possible. I will add a very obvious caveat -- that I am writing this based on my experiences from running a highly-trafficked media website. Applying the same to smaller blogs and websites will require minor modifications and your mileage would also vary depending on the kind of content you are serving.
Before you start on any 'Make Money From Adsense' program, you have to keep two golden rules in mind. The first is to never ever game Google. They watch almost everything pretty closely and even not-so-significant hikes, like from $20 in a day to $100, will easily get eyebrows raised in the Googleplex, which could be followed by a removal from the index of all your pages, earnings and any other good karma you might have on their systems. The second is to generate good content, the stuff that people would want to come back to your website for. If you are going to do content, do it well.
There are three ways to make money from Adsense. The first is the bona fide and perfectly legitimate way, all well within Google's guidelines. The second is to take the dark route and do link farms and automated aggregators like a lot of (even good people) are doing these days, which will eventually get you into trouble. And the third is the grey area, where you are flirting with going over the line, but never actually going over it. It is a risky approach, but you'll need to visit that zone at least once in your great project. But, if you can, always play it safe.
The key to doing well with Adsense or any other online advertising program is numbers. Most advertising programs are of two kinds 1) The spot ad 2) The CPM ad. The spot ads are fixed price slots where you get paid for just showing the ad on your website. With the CPM ad, which Adsense ads are, you get paid only when someone clicks on the advertisement. The simple rule of thumb is that the more visitors you get on your website, the more you get paid for it. With the spot ad, you can ask for greater rates if you have large enough numbers in traffic. With the CPM ad, the greater numbers only increase the chances of the ads getting clicked on. Get your audience first and the rest will follow.
Now, how do you know what the audience wants to read and how do you get them over to your website? With Adsense, it always helps to be specific in terms of content niches always work well in the case of new websites, since they won't stand a chance in getting anywhere near the first couple of pages on Google searches for popular or generic topics (ex: India, India politics). If you write on those themes, there is a fairly good chance that you end up somewhere on the 80th page of the search results. But if you write about something more specific, like how to find a second hand car with buying instructions for non-resident Indians, you'll have a much better chance of being read. The other, easier, way is to find out what people are talking about.
Which is not that huge a deal, but it requires a lot of dedicated effort. Trawl the Delicious popular list and popular tag list every day. Same goes for the Technorati 'Top Searches This Hour' page and the Google News 'In The News' section. Between the three you should have a fairly good idea about what a majority of the traffic on the Internet is all about. The easy way out from this point would be to link to such interesting stories, but that won't get you too far. So, be a nice guy/gal, and add value to the conversation. Put in your own two bits, contribute something unique. Give a reason for users to come to you for the first time and for many more times after that.
Most of the popular content on the net falls into technology (personal tech, computing, home), lifestyle and living (eating, partying, clothing, health food, exercise, sexual health), news (hard core news, gossip, commentary) and the gateway to interesting content (sites like Fark) categories. Most of these have better paying keyword-based advertisements that would be displayed with them. You can even sign up for an AdWords account and see the rates for the different phrases and there are websites that list the top paying keywords (last I checked the highest paying one was above $40 per click), but do exercise caution and not step out of the grey area at the most. It is tempting, but once you get dumped in the Google black hole, a comeback on the same domain is very difficult.
Now we shall deconstruct the numbers game a bit further. The idea in stage one is to retain your regular visitors and then get them to keep coming back regularly. You can interact by either posting regularly or kicking off conversations and replying regularly to comments or even make it a place for people with similar interests to hang out. Basically, give them a reason to keep coming back since all of us are not famous personalities to have just our names pull in the audience. What we are looking at, over time, is to get the same bunch of people to incrementally spend more time at your site week-on-week, in effect getting more from the same.
Next is to keep getting new users all the time. With the old users ads often hit the fatigue/blind spot problem. Even though Google now actively encourages you to 'blend' the ads with your content, regular users soon get used to the idea of a particular corner or a layer being an ad. For getting new users you have to reverse the trawling process by getting listed and pinged on all the major blog trackers and also using the Delicious listings to good effect. With that we get back to the basic idea -- that it is hard work making any decent moolah from Adsense/blogging.
This is by no means a comprehensive or detailed entry on how to get all this done. It is more or less of a stream of thoughts regarding the subject, that first started a comment reply, which grew long enough to be a post on its own. In terms of pure numbers, with good placement and smart content, anyone who gets above 300 - 400 page views on their blog (not personal stuff, unless you happen to be Dooce or the next Dooce in waiting), should be able to start making a tidy sum from their blogs. But to finance anything other than the odd bottle of booze every month from blogging takes dedication, discipline and an innate feel for the medium.
Crossposted to the 'serious' blog.