Google AdWords is Google's main advertising product and main source of revenue. Google's total advertising revenues were USD$28 billion in 2010.
AdWords offers pay-per-click (PPC) advertising, cost-per-thousand (CPM) advertising, and site-targeted advertising for text, banner, and rich-media ads.
The AdWords program includes local, national, and international distribution. Google's text advertisements are short, consisting of one headline consisting of 25 characters and two additional text lines consisting of 35 characters each. Image ads can be one of several different Interactive Advertising Bureau (IAB) standard sizes.Here is an Infographic about how Google Adwoks Work ?