Here's the recipe that's worked for me...
1 - find a topic you LOVE - don't start doing this for money, as that takes a while to develop, and loving the topic will carry you through
2 - start researching what's currently out there - chances are good, even in an almost saturated vertical, that you'll be able to find some niche to shimmy into
3 - start building content - unique content, written by you, because you love the topic and have some knowledge about it - shoot for 100+ pages to start with
4 - make sure that any time a page is put live (make them live as you finish them - don't make all 100 then dump them onto the server - *NOTE - this is my preference), it has Google Adsense on it - and follow their rules - max of 3 ads, plus one text link unit on a page - don't try to cheap this...and don't short yourself - put them all in place
5 - be sure to read Google's suggestions on how to integrate their ads for best performance - while not a 100% homerun every time, they know what they are saying and it's a great ballpark to start from
6 - did I mention building lots of pages with great, unique content yet? Better get on that one...
7 - become involved in the community - not your own, silly (though that's good too, but for other reasons), but the community your website targets. Find the posting forums and leading blogs and start becoming involved - post rational, well-thought out articles, be willing to share your knowledge and answer questions - it takes time, but pays dividends as other community members recognize your knowledge and spread the word about your site.
8 - link building...hmmm - I tend to shy away from active link building in all but a few rare cases. I prefer to build useful content and let users spread the word over time. My link building takes the form of my involvement in (literally) 50+ active communities for one of my websites topics.
9 - long-tail - stuck for what to build new pages for? Snag the little tool from Hit Tail and start seeing those really odd searches folks have found you for - then build pages to focus in on missed opportunities (warning - not EVERY phrase will be worth chasing...
) (Hit Tail tool at this URL: hittail.com)
10 - Be patient - it'll take a while for a new site to rank and develop traffic. In today's world, it's all about proving yourself - so plan on loving your work for what it is for the first 9 months or so - seriously. There is no quick path to money online any more.
Now, all this is well and good. Many folks know most of this already - some know all of it and more.
The real questions is - does it work?
Well, that's my recipe, and it works. You'll have to take my word for this, but I'm currently averaging right around the $1,000 USD per month mark from Adsense - with ONE website (and it's attached blog). Now, I know folks making more money, but hey - what would YOU do with an extra grand each month?
Me? I'm on the hunt for a 1952 Willy's Jeep.
Naturally, the site is about Jeeps...
PS - if you're going to set up a blog, Wordpress is a good way to go - easy to install, easy to use, easy to optimize, plenty of support. I've used other platforms...and I'm 100% WP now.
...and for some useful tips on running your blog and optimizing it, Jennifer Slegg just posted a solid article this morning at Search Engine Land and it's worth bookmarking as a reference, IMO. (Jennifer's article at this URL: http://www.searchengineland.com/070109-141617.php