They own alot of other companies aswell, its not just google search engine... they make most of the money from ads
Well, not only do they make money from AdWords, but they also have other sites, such as YouTube. Just imagine how many visitors YouTube gets, i bet they sell ad space for millions!
They also make a relatively smaller amount of money from selling their enterprise search and google mini boxes.
Most of the money comes from advertising revenue. Notice all the ads displayed at the sidebar everytime you make a search? Companies and individual pay to be listed there.
I think they earn mainly from AdWords though there are a few other sources of income as well! And we are talking about billions of dollars here!