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"PageRank relies on the uniquely democratic nature of the web by using its vast link structure as an indicator of an individual page's value. Google interprets a link from page A to page B as a vote, by page A, for page B. But, Google looks at more than the sheer volume of votes, or links a page receives; it also analyzes the page that casts the vote. Votes cast by pages that are themselves "important" weigh more heavily and help to make other pages "important."
In other words, a page rank results from a "ballot" amongst all the other pages on the World Wide Web about how important a page is. A hyperlink to a page counts as a vote of support. The PageRank of a page is defined recursively and depends on the number and PageRank metric of all pages that link to it (" incoming links"). A page that is linked by many pages with high rank receives a high rank itself. If there are no links to a web page there is no support of this specific page. The Google Toolbar PageRank goes from 0 to 10. It seems to be a logarithmic scale. The exact details of this scale are unknown.
The name PageRank is a trademark of Google. Whether or not the pun on the name Larry Page and the word "page" was intentional or accidental remains an open question. The PageRank process has been patented (US Patent number 6,285,999). [more info on the patent]
An alternative to the Page rank algorithm proposed by Jon Kleinberg is the HITS algorithm .
Suppose a small universe of four web pages: A, B, C and D. If all those pages link to A, then the PR (PageRank) of page A would be the sum of the PR of pages B, C and D.
But then suppose page B also has a link to page C, and page D has links to all three pages. One cannot vote twice, and for that reason it is considered that page B has given half a vote to each. In the same logic, only one third of D's vote is counted for A's PageRank.
In other words, divide the PR by the total number of links that come from the page.
Finally, all of this is reduced by a certain percentage by multiplying it by a factor q. For reasons explained below, no page can have a PageRank of 0. As such, Google performs a mathematical operation and gives everyone a minimum of . It means that if you reduced 15% everyone you give them back 0.15.
So one page's PageRank is calculated by the PageRank of other pages. Google is always recalculating the PageRanks. If you give all pages a PageRank of any number (except 0) and constantly recalculate everything, all PageRanks will change and tend to stabilize at some point. It is at this point where the PageRank is used by the search engine.