The Google Search Engine
Google's search engine is a powerful tool. Without search engines like Google, it would be practically impossible to find the information you need when you browse the Web. Like all search engines, Google uses a special algorithm to generate search results. While Google shares general facts about its algorithm, the specifics are a company secret. This helps Google remain competitive with other search engines on the Web and reduces the chance of someone finding out how to abuse the system.
Google uses automated programs called spiders or crawlers, just like most search engines. Also like other search engines, Google has a large index of keywords and where those words can be found. What sets Google apart is how it ranks search results, which in turn determines the order Google displays results on its search engine results page (SERP). Google uses a trademarked algorithm called PageRank, which assigns each Web page a relevancy score.
A Web page's PageRank depends on a few factors:
The frequency and location of keywords within the Web page: If the keyword only appears once within the body of a page, it will receive a low score for that keyword.
How long the Web page has existed: People create new Web pages every day, and not all of them stick around for long. Google places more value on pages with an established history.
The number of other Web pages that link to the page in question: Google looks at how many Web pages link to a particular site to determine its relevance.
From: http://computer.howstuffworks.com/google-algorithm.htm
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