The best business model ever created has to be the float. You hold on to other people’s money for them, and you get to keep the interest. It’s a beautiful thing. One of my favorite business stories is the tale of how J.C. Fargo, the president of American Express, became so annoyed trying to get cash while on an 1890 trip through Europe that he went home and invented the travelers cheque. What he didn’t even realize is that the float on all those cheques would quickly become a huge money maker for his company. He must have felt like he had fallen into a big tub of cash.

I’ve been thinking about the great little float that Google’s got going with AdSense. AdSense is the program that allows publishers to run Google ads on their sites (like those ugly little boxes over there in the right column) and earn a cut of the ad revenues. It sounds totally win-win, but there’s a catch: Google doesn’t pay you until your AdSense balance goes over $100. That’s nothing for the relatively small number of big sites that make serious AdSense dough, but it’s actually a big hurdle for most AdSense members, who may only make a few cents or a few dollars a week. In a post earlier this month, blogger Scott Karp talked about the frustrations of the $100 rule:

Google AdSense has an onerous policy of only paying publishers when they earn more than $100. I have $22.60 stuck in my AdSense account, with little hope of getting it out any time in the foreseeable future. In fact, if I abandoned AdSense now, Google would get to keep that $22.60. (It’s clear to me now why Google has so much cash in its coffers — stealing from the little guy!)

Karp then went on to ask his readers to click on his AdSense ads in order to get his balance over $100, a move that seems to have landed him in hot water with Google’s enforcers.

I think Karp’s mistaken about not being able to get his $22.60 from Google. If you’re one of the five losers on earth who has actually bothered to read the AdSense fine print (yes, I’m one of them), you’ll know that if you formally terminate your AdSense membership, by sending an email to adsense-support@google.com, then Google will send you your balance in 90 days, as long as it’s more than ten bucks. (If it’s less than $10, you’re hosed. That turns into Larry and Sergey’s walking-around money, I guess.)

Google doesn’t seem to disclose how many sites are enrolled in AdSense, but it has to be a hell of a lot. Last year, Google took in about $2.7 billion through ads on other people’s sites, accounting for 44% of its ad revenues. Most of that money probably came through big sites, but a decent portion must have come from the little guys. When you add up all the under-$100 AdSense balances earned by the Scott Karps of the world, the total must be a pretty impressive number. That’s free working capital for Google, or it can invest the stash and make even more money. It’s a devilishly good idea.

But it gets even better. Once a little publisher gets a little balance in his account, he becomes more likely to stick with the AdSense program. After all, he doesn’t want to “lose” the money he’s already earned (and, like Karp, he probably doesn’t realize that he would be able to get it by terminating his account). He struggles on, earning a penny here and a penny there, waiting month after month for the $100 mark to arrive. He becomes another Google sharecropper, one of the thousands working the rocky soil of the AdSense plantation. And all the while Google gets to hold onto the poor sap’s meager earnings, using them for its own purposes. In many cases, I’m sure, the less-than-$100 balances never get collected, and Google gets to pocket them for good.

Better than any other company on earth, Google knows the power of very small amounts of money. Collect enough nickels and dimes and quarters and dollars, and you can make billions. The $100 AdSense hurdle may seem like a little thing, but it’s making Google some serious money. At the very least, I bet it pays for the cafeteria at the ‘Plex.