Adsense has probably been the biggest income generator for small to medium website owners since the Internet was created. Finally, people could actually make good money from a site they had been working on as a “hobby”.
Google revolutionized the way Internet advertising was delivered either through search results or by websites who are part of the Adsense program to diplay context advertising.
If people visiting your site, you can make from a few cents to several $$$ when people click on an ad. Google calculates how much you are paid using the advertising algorithm. Largely it depends on the quality of your visitors, the conversion rates of visitors and how much advertisers are prepared to pay for certain keywords.
Some keywords pay more than others. Higher paying keywords usually means a more competitive market.