I have often pondered this question?
Here are my own basic thoughts on the complex subject.
Most websites I visit have some kind of adsense system running; I would estimate that some of these are making good money from the Google system. Certainly sites with over 1000 visitors per day should receive a small amount of revenue.
Generally I believe the adsense system is a good one, however like most things these days the adsense system has been misused by individuals who fully understand how search engines work; unfortunately these people have already made their money. These people have used many tactics in the past to raise their sites page ranking, thus ensuring more visitors, more visitors means more revenue from the system. These sites are generally kept open for a few months and then closed down, with the next one instantly opened up. This practice has been going on for years. The sites are even sold daily on EBay; I would imagine they are just about to be banned.
What normally happens when a few people misuse a system is it leads to others suffering, and in this case it has happened. Google is sandboxing new sites for longer. Saying this company had to act, they have now introduced the ‘Big Daddy’ update. This update has affected sites that have large numbers of irrelevant links or millions of irrelevant web pages. Unfortunately it has also affected the ranking of genuine businesses; hopefully this is just a temporary blip. My own opinion is the internet should be a level playing field for everyone; however I somehow doubt it ever will be.
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I believe there is a place for adsense on most sites as long as it is discrete, well set up and does not look out of place, (fonts, colours etc), The main thing to think about is what do you want from your visitors. Most sites offer a product to potential customers. This causes the dilemma of balancing potential revenue from adsense against losing a potential customer, what I mean by this is, a visitor may be interested in your site, however you could lose them instantly to Google. This is why in my opinion is if your site has a product you are selling, you should never employ adsense on your homepage.
In conclusion I like the system, it is easy to set up and user friendly. I hope Google manage to filter out the unethical element who in the end will only spoil things for everyone.
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