Google's hidden payroll

Jayant Kumar Gandhi, a former software engineer in New Delhi, is one of hundreds of thousands around the world on Google's shadow payroll.

In his spare time, Mr. Gandhi runs a free computer help website and recently began running ads by Google on his homepage as part of Google Adsense, a program that pays website publishers for advertising space. When visitors click on the ads on Gandhi's site, Google makes a small profit from the advertiser, and in turn, pays a percentage of that profit to Gandhi.

Such clicks can translate into pennies - or dollars - a day for a Web publisher. "I had no intentions of using it for more than a week," Gandhi says. "I didn't believe the stories that Adsense paid decent money. I ignored them as a marketing gimmick."

But Gandhi's Adsense profits have exceeded his wildest dreams. He now earns about $1,000 a month from the program, the same salary he previously earned as a software engineer. His new income has allowed him to leave his job and return to school. "Today I am able to sponsor my higher studies because of Adsense," he says.

Since its launch in 2003, the Google Adsense program has revolutionized Web publishing, turning blogs and personal websites into potentially lucrative ventures.

It is easy to join. A Web publisher or blogger simply completes an online Adsense form. Google then places ads on the site, similar to those that appear next to search results on Google. The ads are contextually matched to content on the host site, so a blog post about having a headache might attract ads for pain-relief medicine.

Anyone with a site is eligible, and Web forums are awash in success stories of small online entrepreneurs placing ads on their sites, sitting back, and watching checks from Google roll in.

But it is Web entrepreneurs in the developing world who are reaping the greatest benefit from the program.

Because Adsense earnings can vary widely depending on a site's traffic or subject matter, many Web publishers in the developed world don't bother participating. Whereas a $25 monthly payout may not be worth the trouble to a blogger in Manhattan, it can mean the world to a blogger in Manila.

Andrew de la Serna runs a small search engine in Davao City, Philippines, and derives about 40 percent of his monthly income from Adsense. "It's great to do what you love to do and earn money from it at the same time," he says.

His earnings have allowed him to purchase a cellphone, develop new websites, and build up his savings account.

Dr. Rodolfo Rafael, who owns a small medical clinic in San Fabian, Philippines, says the Adsense earnings from his medical website allow him to "dream big" and reinvest in his medical practice.

Their experiences are shared across the developing world. In Cairo, Mohamed Sallam was grounded for health reasons from his job as an airline steward, and he now spends time maintaining a Web forum devoted to discussions of Islam. He earns most of his income, about $500 a month, from Adsense.

"The low cost of living here allows us to live comfortably on that income," he says. "My two sons want to try their luck. We have a high unemployment rate here and making money from Adsense would be the perfect solution for them."

Deepesh Agarwal, who runs a small cybercafe in Rajasthan state, India, draws about 90 percent of his income, or $1,500 a month, from his Adsense earnings. It is a princely sum in a state where the average income is just $300 a year.

"Adsense has changed my life," Mr. Agarwal says. "I can afford things that I was not able to before. I am planning to buy a new car. I can save for my future."

The program is a big revenue generator for Google, too. The company earned some $2.7 billion in Adsense revenues last year. Google refuses to disclose the exact percentage it pays out to Adsense member sites, but recent news reports have put that figure as high as 78.5 cents on the dollar.

"We do not disclose [the revenue share] for different reasons," says Brian Axe, an Adsense group product manager at Google. "But it is more than fair. [These success stories] bring a smile to our faces."

Still, many hurdles remain for Adsense users in the developing world, not the least being access to the Internet.

Payment checks from Google can be difficult to receive due to inefficient or non-existent national postal systems, and they can be even more difficult and costly to cash.

There are also legitimate concerns about people attempting to defraud the system, causing many to wonder whether the program has real sustainability. Some website owners try to increase their earnings by clicking on their own ads, and some create automated sites that exist solely to make money from Adsense.

"Google is actively looking for those kinds of sites," and removes ads from them, explains Eric Giguère, author of "Make Money with Google: Using the Adsense Advertising Program."

Google has a clear interest in protecting the program that last year accounted for nearly half of its advertising revenues, and is quick to play down the threat of fraud. "Many times [the fraud] gets blown out of proportion," said Google's Mr. Axe. "I don't think it's an issue that would unravel the business."

For the time being, that "business" offers a rare opportunity to Web users in developing countries to participate on a level playing field with other websites all over the world.

Thanks to Adsense, a blogger in New Delhi can earn the same 5 cents for an ad-click as a blogger in Detroit. For many Adsense users in the developing world, that opportunity has become perhaps the most unintentional - and most successful - development program to spring from the online revolution.