Google are to give AdWords as an API, to let advertisers choose how, when and what is displayed. This seems to make sense if, as Silicon Valley Watcher state, rival Kanoodle offers twice the click-through revenue as Google because it gives greater control to those people who know their audience. They know best. Google seems to be applying the same principle: "The API will allow advertisers to self-administer the delivery, the timing and the price they will pay for their text ads." [Silicon Valley Watcher].
It also marks the turning point from Google "from an online services company to an IT platform for global ad. delivery". The API obvioulsy isn’t as strong as say, Amazon’s who practically own the ID to every product on the planet. Google are the middle-men. But if developers start to use the Google API to improve functionality and easy tie-ins to online market places in the longtail specifically, where returns per item are small [so it’s not worth any human time to promote in a more labour intensive way that I understand Kanoodle do], then they’ll become good and invaluable middle-men.
Adwords delivers paid text ads to users of its search services.
Adsense delivers text ads to readers of a web page which are matched to the content of that page