fezziwig - 6:37 pm on Jun 5, 2004 (gmt 0)

I have a dumb question. How does Google know what converted?

Perhaps they don't. Perhaps it's all part of their smoke and mirrors routine.

Google allows AdWords advertisers to place some code on their "success" page (the page that would indicate that the visitor has bought or signed up for something).

Placement of that code is arbitrary.

Perhaps Google is using this nebulous measure as a way to lower the EPC of its small to mid size AdSense publishers to increase Google's profits and to fund the placement of AdSense on low converting high traffic publishers?