A ranking on a search engine is a web page’s listing and relative placement on a results page (known as a SERP) for a certain search query. As an example, if you type “house plans” into the search box at Google, you will get those listings displayed (10 listings per page by default) that Google deems most relevant to the search phrase house plans, sorted in order of relative importance.
The most relevant and most important web pages are listed in descending order. For Google, page relevancy is dependent on how well a web page “matches” a specific word search. Page importance on the other hand is dependent on the quality and quantity of links that point to your web page from other websites.

The Google algorithm can be broken down into two major groups of factors:

On-page (keyword) factors. Keyword factors involve how, where and when keywords are used. Meaning how well your website is optimized for your most important keywords, and if those same keywords appear in your content and in links. Keyword factors determine page relevance.
Off-page (link) factors. These include the quantity and quality of links that point to your site. Link factors determine page importance and are related to Google PageRank (PR). Links play a VERY important role in getting high rankings, particularly for competitive markets.
Very simply put, Google finds pages in its index that are both relevant and important to a search for a particular term or phrase, and then lists them in descending order on search results pages.

Top Things Google Looks For:

Keywords used in link text – both on your site and especially on other websites that point to your site. And the more links you have on other sites that point to your site and that contain your most important keywords, the better, all else being equal.
This is extra important if you are targeting broad, generic or otherwise “competitive” search terms.
2. Keywords used in the title of your Web pages (between the <TITLE> tags).
3. Keywords used in headings (H1, H2) and in the body of your Web pages.
4. The PageRank (PR) of your web pages, which in turn is dependent on the number of links that point to your site from other sites. The importance of these incoming links in turn is dependent on the PageRank of the linking page, which in turn is dependent on the number of incoming links to that page, and so on.
5. Web pages that contain at least 200 words of relevant text content. The more web pages on the site, the better chance of ranking well for a larger number of keyword phrases.
6. How often the content on your site is updated. You should update your site once a month if possible.
7. How fast you are obtaining new links (too many links too fast is a bad thing).

The PageRank Equation

Here is the official PageRank equation. It is calculated by solving an equation that includes each of the billions of web pages in the Google index:

PR(your page) = 0.15 + 0.85 [(PR(page A) / total links (page A) ) + (PR(page B) / total links (page B) ) + …]
A couple of observations to note about the PR equation:
• PR is based on individual web pages – not on a website as a whole.
• The PR of each page that links to your site in turn is dependent on the PR of the pages that link to it, and so on iteratively.
• A link’s value (amount of PageRank or “voting power” forwarded to the linked-to page) is at most only 85% of the linking page’s PageRank value, and this value is diluted (decreased) by the number of other links on that page.
• PR has nothing to do with keywords or text in links – it is purely dependent on link quantity and link strength, as discussed previously.
Some may incorrectly conclude that a link from a page with a PR = 4 and with only a few outgoing links is worth a more than a link from a page with a PR = 6 with 100 outgoing links because for the latter, the “voting power” or value is divided up among 99 other links.
However, you must remember the logarithmic nature of actual PageRank. A link from a PR = 6 page with lots of outbound links may indeed be worth more than a link from a PR = 4 page that has only a few outbound links.

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