First conceived by Google Cofounder Larry Page during his days at Stanford University, PageRank is a critical piece of Google's success story. Google was able to return higher quality search results by adding PageRank to other, existing criteria such as keyword relevancy to gain the competitive edge it needed to propel itself to the top of the search industry.
The Google PageRank system rates the quality and number of links leading to a Web site on a scale of 1-10, with 10 being the highest. Google counts each inbound link as a "vote" for the Web site. But, the Web site with the most votes doesn't always win the top spot.
The system is loosely based on the principles of democracy. Each inbound link counts as a vote for that Web site. Google took it a step further to ensure credibility. Some votes count more than others. Generally speaking, a link from a page with a higher PageRank of its own provides a bigger boost than a link from a page with a lower PageRank.
The formula becomes even more complicated: the more outbound links a Web page has, the smaller the PageRank it can pass on. So, in some cases, a page with a lower PageRank can pass on more credibility than one with a higher PageRank.
Webmasters understood Google's system and found a way to make money with it. Blogs and other Web sites with stellar PageRanks began selling links on their sites, charging customers for the chance to earn a higher PageRank and thus a top spot in Google’s search results.
To combat this profiteering, Google changed the way it calculates PageRank in October 2007 to devalue paid links and lower the PageRanks of many well-established Web sites such as Washingtonpost.com, Techcrunch, Endgadget and Forbes.com (Forbes.com, October 24, 2007).