Google is sometimes said to be the only company that makes significant amounts of money from advertising online. This comes from two basic sources, ads that accompany search results on Google (AdWords) [1] and the money Google makes from running ads on other websites (AdSense).

Google money machine defies common sense, according to The Register. I’ll leave the finer details to those more knowledgeable about the inner working of Google’s ad system. There is a more basic point that puzzles me – why does anyone ever click on the AdWords ads?

Clearly PageRank will never be perfect, but people must have a high degree of confidence in it, else they would not use Google as a search engine. Thus, when searching for widgets, if a particular widget vendor doesn’t appear high up in the PageRank results, why click on its paid Ad? It’s obviously not the best choice. AdSense ads on other websites (e.g. newspapers, blogs, etc) may make sense, but if any website shouldn’t have ads it is a search engine.

[1] Apparently these are the links that appear in a column on the RHS of the screen, underneath where the red ABP stop sign normally is in Firefox.

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