Google AdSense is currently the largest online advertising service. Advertising type is CPC (cost per click).
How it works
Webmasters go to google adsense page and fill a form to apply for an AdSense account; you also have to mention your web site URL and if your site meets the Google AdSense quality standards then Google will send a note telling you that you ware accepted.
Then you login to your AdSense account and basically copy a html code, you paste that html code inside your site code and in around 10 minutes you should see the ads appear on your site.
When someone clicks an ad then you get paid.