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Adsense is a PPC (Pay Per Click) ad network. Publishers use a portion of space on their websites/blogs to serve Adsense ads. (For eg – check out the beginning of this post, you will find such an ad space used by Adsense.)
Now Google Adsense pays you for every valid CLICK made on those ads on your website/blog.
When your total earnings reach a minimum of $100, they send you your payment by the end of that month by means of check (worldwide) or wired transfer/any other means (only for some limited countries).
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