It can be confusing for beginners to grasp the difference between Google Adwords and Google Adsense. They are in fact two separate programs, although they work in tandem with each other to deliver results for all parties involved.
Google Adwords is the program that allows advertisers to advertise their website by the use of ads. Those advertisements most often show up on Google?s search results page (usually on the right hand column). They can also be displayed on Google?s partner sites (like other search engines) or on publisher/webmaster?s websites.
As an advertiser, you only pay Google for your ads that show up on their site and on their partner?s sites. You do not pay for your ad to show up on other publishers? sites. In this instance, you would pay per click (PPC).
Google Adsense refers to the program wherein publishers sign up to run advertisers? ads on their website. The publishers are then paid by Google for each user they provide to those ads.