How effective are ad words? Are they a good business model?

[AK]

It looks like many sites (including Yahoo! Answers) probably benefit from targeted advertising on the side panel, but do customers really even use that? I mean, I am convinced that even heavily-trafficked sites and apps like Facebook, YouTube, and Twitter will go out of business in 10 years if they don't find some other way to make money. Maybe I'm missing something?

[True Blue]

If you have the traffic that Google has, it's most certainly a good business model.

If you're asking about AdSense, where Google places their ads on your site for a share in the profits, unless you have a lot of traffic, you will only be getting pennies.

I would try to find a good affiliate program related to your website that offers CPA (per action/acquisition), not CPC (per click, ala Google AdSense).