humblebeginnings - 9:49 am on Apr 8, 2006 (gmt 0)

"Why do people set their max bid to $3, $4, $5 per click? I'm pretty sure nobody converts that well I don't care if you giving out free gold."

Why do companies sell stuff lower than wholesale prices? Why do folks give away free products?
It's called business. By doing this you establish the reputation of your company or brand. In this case, companies pay a lot to get the number one spot in Google, that's worth something. But remember that if folks set their maximum bid to $5, it doesn't mean they are actually going to pay $5. What they actually pay depends on many other things...