How blogs make money ?

A blog can earn money in quiet a few ways but the most common and the most rewarding are : Advertising Programs and Affiliate Programs.

1) Advertising Programs
Displaying Ads on one's blog has become the most common way of earning money from blogs. Advertisers pay you on the basis of Cost Per Click (CPC), that is they pay you some money for every click on the ads or for every thousand impressions of their ads i.e. every 1000 times their ads are displayed on your blog. These days there are a lot of Advertising Programs on the internet but the best one is Google Adsense and on this blog I will be mostly discussing Adsense only as it is the oldest, most reliable and the highest paying Advertisement Program.

Once you have made a blog you can request Google Adsense to give you an account and display their ads on your blog/website.(its very easy and un-complicated). Adsense will then give you a small piece of code which you will have to add to the template of your blog (again a very easy process). Once you have added the code, Adsense will start displaying Ads on your Blog.

When visitors come to your blog and click on these Ads, Adsense will pay you for it. You can log into your Adsense Account at any time and see how much money you are making. Adsense pays you every month through cheque provided that you have earned at least $100 in that month.

2) Affiliate Programs
Affiliate Programs are similar to Advertising Programs. The only difference is that Advertising Programs display a variety of Ads of different products and services on your blog, while under an Affiliate Program you will have to display a Banner/button/link of a particular product or service. They pay you in the same manner as Advertising Programs do, that is either Cost Per Click or for every Thousand Impressions of their banners etc.
Some popular Affiliate Programs are : Amazon(sells books and merchandise) , Linkshare, CJ.com, ebay etc.