Darren Rowse has written a long article describing methods available for bloggers to earn money online directly from their blogs. The essence of this guide to making money online, added with some entry of my own, is summarized below.
A number of different monetizing methods are available for bloggers to use. Selection of which methods to use depends on blogs' niche, number of visitors/subscribers, impressions and expertise, among other things.
Contextual Ads - This is a pay-per-click (PPC) or cost-per-click (CPC) ads system based on blog contents (e.g. Adsense, YPN). It is a good system for blogs with specific niche topic. General blogs or blogs without any niche will not work well because the systems do not have any context to 'lock' on to when selecting what ads to display (resulting in displays of some very general ads).
Non-contextual CPC ads - Display ads without having to relate to context, such as Chitika’s eMiniMalls.
Impression-based ads - Payment are made based on the number of people viewing the ads; only good for blogs with large traffic). Examples: Fastclick and Tribal Fusion.
Text Ads - A text-link on your blog sold as ads by text-link ads programs (such as AdBrite, Text Link Ads, and Bidvertiser). These programs sell your text-links to their own pool of advertisers; the benefit is that you don’t have to go through the hassle of finding your own advertisers. You also have a degree of control over what ads to run and what prices to set.
RSS Ads – Many ads programs display ads in RSS feeds. Some programs only offer this option to blogs with a certain number of traffic, impressions, or subscribers.
Well established blogs with large traffic have better chances of directly finding their own advertisers or sponsors to display ads. Typically, blogs with specific niche have more chances of getting sponsors with the same niche (e.g. blogs about camera getting Nikon or Kodak as sponsors). Ads are sold in the form of banners, text-links, buttons, or newsletters. Another type of sponsorship is sponsored posts: bloggers are paid to write specific posts as required by sponsors, or posts reviewing sponsors’ own blogs (positively I suppose).
3. Affiliate Programs
Affiliate program providers (e.g. Amazon, eBay, Linkshare, Commision Junction, Clickbank) pay you commissions for sending readers to purchase their products/services. Participating in these programs may require you to put more effort (than needed to setup ads in your blog) to influence readers to buy the products or services.
4. Selling Blogs
Well established and profitable blogs may be (and have been) sold at lucrative prices. An example is Weblogs Inc. which were sold to AOL for $25 million. But, to reach that level of success is extremely difficult and rare. Some smaller blogs have been sold at auction sites like eBay and SitePoint.
Only a very small number of blogs have been successful at making profitable income through donations. Most of them have large number of loyal readers.
Successful bloggers have used their influential blogs as brand names to be sold as merchandises (T-shirts, mugs, stickers, etc).
7. Paid Subscriptions
Selling blog contents to subscribers is an option to bloggers but a difficult one to profit from because similar contents are available free online. Bloggers would need a certain degree of expertise or exclusivity to have readers wanting to pay for these contents.
8. Blog Networks
There are two ways to profit from these methods: (1) Start your own network and pay bloggers to write in your network while profiting from the seven methods above. (2) Join other networks as a paid writer.
If you're new to this, getting too excited to try everything on the list at the same time would be a big mistake. Building your blog from the basics up the ladder - with patience - is the key. It's tempting to try all the different monetizing methods and see if it works more than others, but you'll end up wasting your time too much learning on how to get the most out of the different methods. It's best to start from the most common ones (most likely Adsense) and build up your experience getting the most out of it. Your experience then will make it easier for you to learn other new methods in time. Anyway, Adsense has been reported to bring in the biggest chunk of revenues to many popular bloggers.