When a user enters a search query, Google uses a text-matching algorithm to determine which web pages are most relevant to that particular query. The usual result is thousands of web pages that have relevant content. How does Google know which to place first, which might be the most credible? To determine this order, Google uses its text-matching algorithms in tandem with its patented technology - Google Page Rank.
Google Page Rank uses incoming links to your web page to determine your web page’s importance and credibility. The number of incoming links is important but is not the only factor. The site from which the link originates is also important.
Think of each link as a recommendation or a positive testimonial. If you are a business, the more testimonials you have the better, but the one from a Fortune 500 company CEO is probably worth more to your prospective customer than the one from your parents.
Page Rank treats incoming links the same way. More links are better, but one from an established, reputed site (read one that already has a high Google Page Rank) is better still. Google Page Rank for a particular page is directly proportional to the number of links that point to it. However, each of these links is not given the same weight. Some links are deemed more important because they originate on pages that are considered reputable and credible.
Not only is the Page Rank of the originating page important, Google also considers the number of links originating from that page. A link coming from a page with 20 other outgoing links on it will be given less weight than the link coming from a page with only 2 outgoing links. It is possible for a webpage with only one incoming link (called “backlink”) to have a higher Page Rank than a page with multiple backlinks, if the one link originated from an "important" page with few links.
Google Page Rank also considers factors such as whether the linking page is on the same server, geographical proximity, and originating page content.