If you are not new to adwords but wants to know the internal details of it and specially the control flow of it like how things are working and what happens when, here is an excellent link to look at which shows pictorially how adwords work and different roles played by advertisers, publishers, the person clicking the ads, the role of google and how money gets exchanged. If you are looking to launch your own similar PPC network (something similar but trimmed down version of course) then this diagram will surely help you.

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