Google Page Rank is simply Google's way of displaying how important a webpage is. Google assumes that when 1 webpage links to another webpage,it's actually "casting a vote" for the webpage. The more votes you have for your webpage, the more important your webpage will be. Page Rank was actually defined by Larry Page and hence it is named after him.
Google also takes into account the importance of other website's pages linking to your own web page. If many web pages link to the website's web page linking to you (i.e. They have a lot of "votes") then their vote will be of more importance and will increase your Page Rank more.
Note: In a website, there can be different webpages and each and every webpage can have different Page Rank's. Actually, there are many misconceptions like does all the webpages in a website have the same Page Rank?
How to know Page Rank of a web page?
To check the Page Rank of a website, you will need to have Google Toolbar installed and then, it will show you the Page Rank of each and every web page. There are also other add-ons on different web browsers which shows the Page Rank. I usually use Mozilla add-on Quirk.
How is Page Rank Calculated?
Page Rank is a very small but confusing formula now lets have a look at it
Page Rank = 0.15 +(0.85 * (a share of PR of every webpage that links into it))
0.15 = The lowest PR a webpage could ever possibly have.
0.85 = A dampening factor... This is just the number that Google uses for their PR formula.
"share" = the PR of the page linking to you divided by the total number of links on that page.
Lets take an example to explain it more.
Example1: Say we've created our website and it has 3 pages in total. For sake of making the math easy,
we'll start each webpage with a page rank of 1. The naming convention of webpages is Page A, Page B, Page C for easy notation.
None of the pages link to each other. They're just pure content web pages with no links to any other pages within our website. Let's quickly calculate the PR of our pages by using the formula above.
Because no web pages link to our pages, there is no "share of PR"... hence it is 0. So if we do the math, we come up with a PR of .15 for each of our pages.
Example 2: Now, let's see what happens if we link page A to page B.
Using our formula, we get
Page A: 0.15 + (0.85*0) = 0.15
Page B: 0.15 + (0.85*(1/1)) = 1
Page C: 0.15 + (0.85*0) = 0.15
You can see that by just linking page A to page B, we've changed the PR of page B from 0.15 all the way up to 1. Big difference!
This is how generally Page Rank is calculated and this is an important factor in Google’s algorithm for ranking websites.