Anyone who has trolled the various search engine optimization (SEO) forums on the web will know that Google Page Rank (PR) is often a topic of discussion. There are a lot of misconceptions floating around out there regarding PR. The following should clear up some of them.
What is Page Rank?
Page Rank is Google's patented method of measuring link popularity for a given URL. By link popularity most people mean the number of times a URL is cited or linked to by other URLs on the web. But in Google's case, link popularity measures not only the quantity of inbound links but also the quality of inbound links. A citation or link from page A to page B is seen by Google as a "vote" cast by page A in favor of page B.
A lot of the confusion around the topic of Page Rank stems from the fact that there are two kinds of PR that Google associates with URLs. One is the "actual" PR for the URL, and the other is the Google toolbar PR for the URL. These two types of Google Page Rank are very different.
Actual Page Rank
The "actual" Page Rank of a URL is one of the 200+ ranking factors used by Google to rank a URL in the SERPs. It is this "actual" PR that has existed since the beginning of Google and that is important to search engine optimization. The formula for "actual" PR was first discussed in section 2.1 of The Anatomy of a Large-Scale Hypertextual Web Search Engine - a paper written by Sergey Brin and Larry Page while at Stanford which became the blueprint for what we now know as Google.
Every new URL starts out with a minuscule amount of Page Rank. As other pages link to that URL, it is passed some amount of PR from the page that links to it. How much PR is passed basically depends on the amount of PR the page linking to it has accumulated and how many outbound links exist on that page. As more and more pages link to the URL, it accumulates more and more PR.
The "actual" Page Rank values of URLs on the web are very fluid. They are constantly being updated as Google's spiders crawl the web discovering new pages, finding that old pages no longer exist or have been moved, discovering new links on existing pages, finding that old links have been removed from existing pages, etc.
It should be noted that you have absolutely no way to know the "actual" PR of a URL. This version of Google Page Rank is never displayed anywhere on the web. Only Google knows its value.
Google Toolbar PR
If you install Google's toolbar in your browser, you can enable their Page Rank tool. It displays a small horizontal histogram at the top of your browser (a little green bar) to provide you an approximation of the PR of the page being viewed. This toolbar PR that is displayed is a logarithmic scaling from 0 to 10 of the "actual" PR for a URL as it was at some point weeks or months prior. By logarithmic I mean that it is exponentially harder for a URL to go from one toolbar PR rating (for example, PR3) to the next higher PR rating (PR4).
Once every few months, Google will essentially take a snapshot of all of the known URLs in their index along with their corresponding "actual" PR values. Then they run a logarithmic scaling algorithm against the actual PR to scale them to values ranging from 0 to 10. They publish these "scaled" Page Ranks as what people commonly refer to as a PR update. It is this published "scaled" PR that is accessed and displayed by the Google toolbar application when you browse a page.
Unlike the "actual" PR, the Google toolbar PR is not used at all by the ranking algorithm at Google. Only the "actual" Page Rank is used by their ranking algorithm. Unlike the "actual" PR which is constantly updated, the toolbar PR is updated once every few months which means it is always out of date and not dependable.
It should be noted that a PR0 (0/10) does not mean that a URL has no "actual" Page Rank. All URLs in Google's index start out with some minuscule amount of PR. It simply means that the URL has not accumulated enough Page Rank to be considered a PR1 (1/10) page.
If a page gets created after Google published their last toolbar PR update, when viewing that page the toolbar will be grayed out and the hover text will be displayed as "Current page is not ranked by Google". The reason for this is that when the toolbar queries the index to retrieve the toolbar Page Rank of the URL, its toolbar PR is null because the URL did not exist when the last toolbar PR update was published. This does not, however, mean that the URL does not have an "actual" PR. Remember, each URL in Google's index has an actual PR.
How is Page Rank Useful for SEO?
Now that you know the difference between "actual" PR and toolbar PR, you might ask, "What now?" Hopefully, you now understand that the toolbar PR, though visible, is pretty much worthless other than being used to give an approximation of a URL's "actual" Page Rank.
A URL's actual PR is a minor ranking factor in the overall Google algorithm when determining how that URL ranks for a particular keyword phrase. However, getting inbound links from higher PR URLs can help to add an extra boost to your rankings, especially if the anchor or link text matches the search phrase and the page where the link resides is relevant to the search phrase.