Planet13 - 2:18 pm on Jul 13, 2012 (gmt 0)

Either they are crazy or you are missing something.

Could be both ;)

Seriously, it could be that they don't have someone competent managing their adwords campaigns and don't realize that they are losing money.

The other thing, as mentioned above, is that they might be losing money on the initial sale but that their follow up marketing is so effective with previous customers that they are able to retain them as a long term customer. Hence, the adwords cost is more than made up for over the "lifetime" of the customer.