Placing advertising on your site can earn you valuable revenue if you have popular content on your website. Google offer a service that can put you in charge of the adverts that appear on your site and you can also track the effectiveness of the service.
The service is called Adsense and is free from Google to use on your site.

It's all very clever but basically Google reads your page then places adverts relevant to your content or to the viewers' internet activity.

To sign up for a free account please visit http://www.google.com/adsense

The system is simpler than it seems and could provide you a residual income from your website.