A large part of Google's multi-billion dollar annual turnover comes from its nifty AdSense advertising program. The software enables website owners to drop in a piece of code to their pages that then serves advertisements provided by Google.

How Does Google AdSense Work?

It all works dynamically and the adverts that are displayed based on the content of the page. So if a website owner places the Google AdSense code on a page about holidays then holiday ads are delivered onto the page automatically by Google.

Everybody wins because when people click on one of the ads - the advertiser gets a visitor, Google can charge a rate for the clickthrough and the website owner who is serving the ad gets a share of this revenue.

It's been an excellent model for all parties concerned and especially as Google has enabled even small website owners to take part which means accumulatively Google's advertising real estate is absolutely vast.

Is The Monopoly Over?

But there may be trouble ahead for Google as, according to sources at CNETNews, Yahoo! is planning a very similar service to challenge Google's.

The two search giants have been up against each in the search advertising arena already but it is only now that Yahoo! seems poised to launch a monopoly-breaking attempt on Google's AdSense program.

This is all great news for smaller website owners as it means the two search goliaths will be vying to provide the best service and offering the best rates to compete for the lucractive ad space.

When Should You Accept Advertising On Your Website?

Well it's a difficult call. Do it too soon and you risk deterring visitors from staying on your website. Do it too late and you'll find that when you DO finally implement it people might not have seen it coming and they may leave your site in droves!

The best policy to adopt is, just like Google, to focus on RELEVANCE. Don't bombard your visitors with advertisements that are totally unrelated to their needs or interests or totally separate to the content you provide on your website.

And remember - often times it can be better to foster relationships and trust with your visitors with one eye on the longer term view rather than hit them with ads to make a small amount of cash in the short-term.