how does You tube earns you money?

When you become well known. Youtube give you Google Ad buttons to display next to your video's. To have this buttons you need to be a Youtube partner, to be a Youtube partner you need to have good daily/weekly videos to upload that people will want to watch and subscribe too. The more people that view your video's the more people will click the Google ad buttons. The more clicks you get the more money Google gives you. They send you a check through the post with the amount of cash you have earned through clicks. This isn't a great sum of money. But it all depends on how much people like your videos.

Edit: Don't listen to Vlad's comment, well known Youtuber's get there views legitimately through hard-work.

I agree with Jimmy, however, I would like to add something more. Firstly as its been said, YouTube partners get money through ads that were placed on their videos. However, I just wanted to share a little secret with you guys. Most YouTube partners use YouTube marketing agencies to help them get views, comments, ratings, subscriptions etc.. Therefore, they have more chances of becoming a YouTube partner quickly. Without waiting for years. YouTube marketing is very popular, but not many people know about it. So if you feel like learning more about YouTube marketing then you can follow this link http://www.getviewed.net/ . I have personally used their services to promote my friends channel. Its not a good idea to use YouTube marketing forever, but its great for a start boost. So you may need the first 10, 20 or 50k views for a start, and also some subscriptions with ratings. Then your videos will automatically get more views since they will be ranked better.

Hope it helped, good luck!

Well some people make things then show them on Youtube, then have a link to their etsy/ebay shop.

they send you a check. If you're a partner that is.

by advertisements