The best way to follow this is to do a search now on Google, Yahoo or MSN and search for shoes and hit enter.
You will now be presented with all the search results from the relevant search engine.
At the top of the search results and on the right hand side you will see results under headers such as 'Sponsored Links' in Google and 'Sponsor Results' in Yahoo.
The search results will be inside a coloured box (please see diagram below - taken from Google):
These results are the paid advertisements using Pay per Click.
The people who own these websites have paid to appear there for certain keywords or phrases and every time someone clicks on their link they are charged the agreed fee with the Search Engines - *hence the name Pay per Click - you pay when your link is clicked
The sponsored adverts are ranked and positioned based on how much you or other people are prepared to pay the search engines to advertise that keyword or key phrase.
For example the Google Search Engine will rank its order based on the amount you wish to pay for each click and also the adverts popularity.