I was under the impression that you can not have content blocking ads your website. So how does Hotmail get away with it? When I click top right to reveal options a menu drops down and covers most of the ad down that side. I didn't think that was allowed.
Even if it did use AdSense, not all publishers are equal. Hotmail would undoubtedly make Google millions in advertising revenue. They are forgiving of publishers like that. Much easier to make life difficult for the $5 a month blogger.