To begin this process you first have to create a standard Google account. You then have to agree to the terms and conditions of AdSense,

click to enlarge
which among other things has standards for how the ads are placed on the page.
From here you get a monetary amount based on viewers clicking on the specified advertisement or on “impression,” which pays out for each time the page is loaded up because the advertisement is then visible to the viewer.
Some advertisers will select websites that are directed toward their advertisements and select an option to pay a bulk amount for a certain number of advertisements.
Along with these are a number of options for advertisement types such as “search advertisements,” which gives advertisers the options of making their ads present in search results.
In this way Google attempts to give both advertisers and webmaster a series of options.