Here is the paper from Stanford where Sergey Brin and Lawrence Page present their system for Google.
http://infolab.stanford.edu/pub/papers/google.pdf

For Google, there are two main criteria for determining where your page comes up on search results. They are:

1. Relevancy - how relevant your page is to the query
2. Pagerank - how many people link to your page

Relevancy ranking is determined by comparing the search words to words:
A. in your domain name
B. on your page
C. in links to your page

Pagerank is calculated based on the quality of the pages linking to you.

It is not easy for search engines to figure out which pages are most relevant to a query. The easier you make it for the search engines, the higher you will show on search results.

So, even if you have a website with great content, if no one is linking to you, you are going to have a problem showing up high in the rankings.

The best way to show up high in search engine rankings, is to do two things.

1. Keep pages laser focused on one set of keyword search terms. This is best done by having a domain name that matches the keywords and having content on the page concentrated on the keywords.

2. Get other people to link to you. When they link to you, have them include the keywords in the link.

For example, if your objective is to get more business for your tree service in Boca Raton, optimize a page for the
keywords "Boca Raton tree service". If you can, get the domain name www.BocaRatonTreeService.com. Then create a
page specifically about tree service for Boca Raton. Lastly, exchange links with related websites. Have them
include the words "Boca Raton tree service" in the linking text.

By Andrew Weitzen (c) 2010

Weitzen is the publisher of several online Internet journals including: InternetHandholding.com, DomainNames.gs, DotNetNuke.bz, Programmer.bz, Software.vg, WebHosting.vg