(This is a guest author article.)

Let me make it clear at once that this article is aimed more at my well-meaning friends in the blogging world who had this wrong notion that google adsense is actually a good way to earn money online with your website. If you're one of those google fans who think they can do no wrong, you can actually stop reading this now. Much of what I am going to say will be to your distaste.

First let me begin by saying that google adsense is actually a good way to LOSE money. Sounds screwy? Let's examine the situation as it exists today and see what "benefits" you get out of hosting google ads on your website.

  1. You sign up with the google adsense programme to get the "privilege" of hosting google's ad on your website. Note that you have agreed to a lot of terms and conditions at this point just to get this dubious privilege. I'll come back to the ToS later.
  2. Your advertisers pay google, not you, to have their links put up on your site.
  3. Google controls your rightful money until you actually receive the payment. There is no guarantee that google will honour their agreement. The slightest doubt on their part and they can easily withhold your payment (example, by citing ToS violations, fraud clicks etc.) Fighting them in court might end up being way too expensive and impractical.
  4. Since you do not receive payment as and when you get the clicks, you are losing interest on that money which you might have earned if it was in your bank account or you had invested it.
  5. You have to constantly keep worrying about whether your content is not in violation of google adsense. Furthermore, since anybody can advertise on your site with "targetted" content, your competitors can easily get valuable exposure on your own website and you have to constantly monitor the links which is a headache. While it might be possible to block your competitors, sometimes you have no idea who your competitors truly are.
  6. Finally google adsense isn't exactly free of spam either. In spite of their strict control, I have seen quite a few spammy links from adsense.

End result? You might not lose anything by putting up adsense on your blog or website, but if you are a small-to-medium site website with moderate traffic, it'll take you ages to earn at a few pennies per click enough to make it worthwhile. The return on investment is actually negative if you consider monetary inflation and interest rates. Finally, because google refuses to allow you to diclose or discuss anything adsense related you are left with no option to negotiate a contract with them. But by hosting adsense ads on your valuable cyber-real estate, you are giving google more advertising revenue and their clients more exposure with their ads. What you get is an undisclosed portion of google's earnings. How can anybody have any idea what percentage of the cut google takes?

And what would really hurt you is your credibility if people see advertising on your website and think that you're making millions off it. Sometimes people tend to feel that any form of advertising on websites is bad and google isn't an exception to the general rule. How can you be sure that they don't see an advertisement for product X, Y or Z which you have actually criticized in your articles? Wouldn't seeing that ad on the very page where you criticize it reduce the credibility of your opinion? How many people will be convinced that you had nothing to do with the links in your ads?

When google stop making their ads clicks-based and pay their content publishers up-front, I'll reconsider adsense. Until then, I will consider it an excellent way to lose money. Better to have no advertising than google advertising.