At WordPress.com, we sometimes display advertisements on your blog to help pay the bills. This keeps free features free! We only run them in limited places, and we do not show ads to logged-in readers, which means only a very small percentage of your page views will actually contain ads.
Just to clear up any confusion, WordAds is different than the limited advertising mentioned above. WordAds is our program for users who want to turn ads on intentionally and share the revenue with us. http://wordads.co/
If you want to make sure you never have ads on your blog for any users you can purchase the No Ads Upgrade from the Store in your dashboard. http://en.support.wordpress.com/no-ads/