What is Page Rank?
PageRank is a numeric value that represents how important a page is on the web. Google figures that when one page links to another page, it is effectively casting a vote for the other page. The more votes that are cast for a page, the more important the page must be. Also, the importance of the page that is casting the vote determines how important the vote itself is. Google calculates a page's importance from the votes cast for it. How important each vote is is taken into account when a page's PageRank is calculated.
PageRank is Google's way of deciding a page's importance. It matters because it is one of the factors that determine a page's ranking in the search results. It isn't the only factor that Google uses to rank pages, but it is an important one.
Calculate Page Rank
To calculate the PageRank for a page, all of its inbound links are taken into account. These are links from within the site and links from outside the site.
PR(A) = (1-d) + d(PR(t1)/C(t1) + ... + PR(tn)/C(tn))
That's the equation that calculates a page's PageRank. It's the original one that was published when PageRank was being developed, and it is probable that Google uses a variation of it but they aren't telling us what it is. It doesn't matter though, as this equation is good enough.
In the equation 't1 - tn' are pages linking to page A, 'C' is the number of outbound links that a page has and 'd' is a damping factor, usually set to 0.85.
We can think of it in a simpler way:-
a page's PageRank = 0.15 + 0.85 * (a "share" of the PageRank of every page that links to it)
"share" = the linking page's PageRank divided by the number of outbound links on the page.
A page "votes" an amount of PageRank onto each page that it links to. The amount of PageRank that it has to vote with is a little less than its own PageRank value (its own value * 0.85). This value is shared equally between all the pages that it links to.
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