Internet marketing / search engine optimization (SEO) metric. PageRank is a numeric analysis ranking algorithm, developed by Google, that takes into account, not just that traffic to a site, but also the usability of the site and most importantly the number of links to the site. Consequently, PageRank is used as a gauge for professional link building services.

In simple terms, Google views each link to the page as a vote of confidence for the page.  The more votes that are cast, the more important the page must be. This is then further enhanced by ranking the importance of the casting vote.  In otherwords, if an important site links to the page then this has a bigger impact on the Page Rank for the page than a vote from a site page that has a low Page Rank. While reciprocating links (website A links to B and B links back to A) are not weighted as heavily as one-way links (website A links to B and B does not link back), these still should be important to your link building strategy.

The importance of the page (i.e the Page Rank) is one of the factors used to rank the page in search results. While this is an important factor, it is not the only factor to consider, and should be seen as the measure of the importance of the backlinks pointing to the site.

A good review of the Page Rank calculation is provided by Whitelines.

Not all links are counted by Google and some links may even penalise sites.  It is suggested that Google do not penalise sites for the links pointing in to the site as the webmasters cannot always control which sites them.  However, as webmasters have full control over which sites, they link out to certain links can penalise the site.  Especially links from spam sites or link farms.

A little known fact is that Page Rank and SEO are only loosely connected (and a site with a high Page Rank may appear low on a web search while a low Page Rank site may appear high on the search).  This is because Page Rank is only one of the factors in the ranking algorithm.

So is Page Rank important? The answer is a definitive YES. Site value is based on Page Rank and also as Page Rank is widely known about, the perception is that high rank means more reliable data or a better data source or a more popular website (perception becomes reality).

For the more technical, the page rank algorithm is shown below.

For more detail visit the link http://en.wikipedia.org/wiki/PageRank.