Google is making money by displaying relevant search results and by Google Adwords. Google Adwords offers webmaster to advertise their product/website on search engine and on different sites and blogs.
For example, Microsoft is promoting their windows 8 using Google Adwords and if I have published the content about windows or any operating system at that time Google will put windows 8’s advertise on my blog and whenever visitors clicks on that advertisement at that time they will redirect to the Microsoft’s website. When the visitors clicks on the advertise at that time the blog/site owner getting paid according to the CTR (click through ratio). Google AdSense is 60% revenue sharing network.
Google AdSense is the best option to monetize your blog/website Because only Google AdSense pays more then any other publisher network.