Understanding Google AdSense

Google AdSense allows webmasters to dynamically serve content relevant advertisements on web pages. If the visitor clicks one of the AdSense ads served to the website, the website owner is credited for the referral. Google's AdSense program essentially allows approved websites to dynamically serve Google's pay-per-click AdWord results.
Website maintenance related to AdSense is very easy and requires very little effort. Webmasters need only to insert a Google generated java script into the web page or website template. Google's spider parses the AdServing website and serves ads that relate to the website's content. Google uses a combination of keyword matching and context analysis to determine what ads should be served. The java script calls the ad from Google and will ensure that ads are served each time a visitor goes to the web page.
Early on Google implemented a filtering system that allowed webmasters to prevent a specific domain's ads from being served on any websites in their account. Ad blocking meant that webmasters could prevent their competitor's ads from being dynamically served on their websites.
Google provides a wide variety of ad formats to match the most suitable option with a website. Webmasters can select from a handful of preformatted towers, inline rectangles, banners and buttons. The ad boxes can be modified by webmasters to resemble the website's color scheme. 

Ads can be geo-targeted based on the visitor's location. Advertisements containing content in English, French, German, Italian, Dutch, Portuguese, Japanese, or Spanish are all available.
Channels
Google recently introduced channels, enhancing AdSense reporting. When a channel is selected Google modifies the java script to include additional tracking. The additional tracking information allows webmasters to track a variety of metrics across their sites. Channels can be used to measure performance on various domains, differences in revenue with various ad sizes, or placement. By assigning each group of pages to a specific channel and comparing results in custom channel reports webmasters can work at increasing their AdSense revenue.