I've been hearing this term, exactly what is it? I have a ad on a PTC site that has adsense ads and is about mesothelioma. What does it mean?
An example of arbitrage is like buying ads for $0.05/click on Yahoo! Search Marketing on a landing page that has a high CTR, with keywords that pay $0.95/click or more. Google frowns upon this and most of the time you get screwed when you do it!
Here's a reply I made in another similar thread recently: What is Arbitrage? The simultaneous buying and selling of the same stocks, bonds, etc, in different markets to profit from unequal prices. Source The same applies to Adsense. You try and place Adword ads for say 1 cents a click and people come to your site in the hope that you'll make 1 dollar a click. A technique widely used by people who specialized in Made For Adsense sites. That's why people quickly associate arbitrage with MFA. But that's the explanation of what happens in between but also it being around long before Adsense.
Arbitrage, in stock market tmos word is used for safe trading, One has to buy a dtock in delivery segment and sell the same stock in future segment.