Cringley is always an interesting read, and in this recent article he tackles Google AdWords. Interesting info about their algorithm.
This second effect deserves its own paragraph. As a Google advertiser you can decide to pay some amount — say $0.20 — to have your ad appear whenever someone’s Google search includes the word "Cringely." To be honest, I just checked, and while there are 1,030,000 Google results for "Cringely," there are no ads at all on the results page, indicating — as many have long suspected — that I have no commercial value whatsoever. But for searches that involve very common words like "mountain bike," or "libido enhancement," for example, there are multiple pages of ads, and what puts your ad on the front page is not just how much money you are paying, but also how frequently Google searchers actually click on your ad.
This makes a lot of sense because Google wants to feature ads that its users find interesting enough to click on, both because it indicates they are more intrigued than annoyed by the ad and because Google makes money from the clicks-through. So without having to actually read the ads individually, Google has found a revenue-generating way of measuring their usefulness to readers by monitoring click-throughs.