Lets take the simplest example network: two pages, each pointing to the other:

Each page has one outgoing link (the outgoing count is 1, i.e. C(A) = 1 and C(B) = 1).

Anybody who monitors their rankings with the same vigor that we in the SEO community do will have noticed some fairly dramatic shifts in the algorithm starting last Thursday (July 5th) and continuing through the weekend. Many sites are rocketing into the top 10 which, of course, means that many sites are being dropped at the same time. We were fortunate not to have any clients on the losing end of that equation however we have called and emailed the clients who saw sudden jumps into the top positions to warn them that further adjustments are coming. After a weekend of analysis there are some curiosities in the results that simply require further tweaks in the ranking system.

This update seems to have revolved around three main areas: domain age, backlinks and PageRank.

Domain Age

It appears that Google is presently giving a lot of weight to the age of a domain and, in this SEO's opinion, disproportionately so. While the age of a domain can definitely be used as a factor in determining how solid a company or site is, there are many newer sites that provide some great information and innovative ideas. Unfortunately a lot of these sites got spanked in the last update.

On this tangent I have to say that Google's use of domain age as a whole is a good filter, allowing them to "sandbox" sites on day one to insure that they aren't just being launched to rank quickly for terms. Recalling back to the "wild west days" of SEO when ranking a site was a matter of cramming keywords into content and using questionable methods to generate links quickly I can honestly say that adding in this delay was an excellent step that insured that the benefits of pumping out domains became extremely limited. So I approve of domain age being used to value a site - to a point.

After a period of time (let's call it a year shall we) the age should and generally has only had a very small influence on a site's ranking with the myriad of other factors overshadowing the site's whois data. This appears to have changed in the recent update with age holding a disproportionate weight. In a number of instances this has resulted in older, less qualified domains to rank higher than newer sites of higher quality.

This change in the ranking algorithm will most certainly be adjusted as Google works to maximize the searchers experience. We'll get into the "when" question below.

Backlinks

The way that backlinks are being calculated and valued has seen some adjustments in the latest update as well. The way this has been done takes me back a couple years to the more easily gamed Google of old. This statement alone reinforces the fact that adjustments are necessary.

The way backlinks are being valued appears to have lost some grasp on relevancy and placed more importance on sheer numbers. Sites with large, unfocused reciprocal link directories are outranking sites with fewer but more relevant link. Non-reciprocal links lost the "advantages" that they held over reciprocal links until recently.

Essentially the environment is currently such that Google has made itself more easily gamed than it was a week ago. In the current environment, building a reasonable sized site with a large recip link directory (even unfocused) should be enough to get you ranking. For obvious reasons this cannot (and should not) stand indefinitely.

PageRank

On the positive side of the equation, PageRank appears to have lost some of it's importance including the importance of PageRank as it pertains to the value of a backlinks. In my opinion this is a very positive step on Google's part and shows a solid understanding of the fact that PageRank means little in terms of a site's importance. That said, while PageRank is a less than perfect calculation subject to much abuse and manipulation from those pesky people in the SEO community it did serve a purpose and while it needed to be replaced it doesn't appear to have been replaced with anything of substantial value.

A fairly common belief has been that PageRank would be or is being replaced by TrustRank and Google would not give us a green bar to gague a site's trust on (good call Google). With this in mind one of two things has happened; either Google has decided the TrustRank is irrelevant and so is PageRank and decided to scrap both (unlikely) or they have shifted the weight from PageRank to TrustRank to some degree and are just now sorting out the issues with their TrustRank calculations (more likely). Issues that may have existed with TrustRank may not have been clear due to it's weight in the overall algorithm and with this shift reducing the importance of PageRank the issues that face the TrustRank calculations may well be becoming more evident

In truth, the question is neither here nor there (as important a question as it may be). We will cover why this is in the ...

Conclusion

So what does all of this mean? First, it means that this Thursday or Friday we can expect yet another update to correct some of the issues we've seen rise out of the most current round. This shouldn't surprise anyone too much, we've been seeing regular updates out of Google quite a bit over the past few months.

But what does this mean regarding the aging of domains? While I truly feel that an aging delay or "sandbox" is a solid filter on Google's part - it needs to have a maximum duration. A site from 2000 is not, by default, more relevant than a site from 2004. After a year-or-so the trust of a domain should hold steady or at most, hold a very slight weight. This is an area we are very likely to see changes in the next update.

As far as backlinks go, we'll see changes in the way they are calculated unless Google is looking to revert back to the issues they had in 2003. Lower PageRank, high relevancy links will once again surpass high quantity, less relevant links. Google is getting extremely good and determining relevancy and so I assume the current algorithm issues has more to do with the weight assigned to different factors than an inability to properly calculate a links relevancy.

And in regards to PageRank, Google will likely shift back slightly to what worked and give more importance to PageRank, at least while they figure out what went awry here.

In short, I would expect that with an update late this week or over the weekend we're going to see a shift back to last week's results (or something very close to it) after which they'll work on the issues they've experienced and launch a new (hopefully improved) algorithm shift the following weekend. And so, if you've enjoyed a sudden jump from page 6 to top 3, don't pop the cork on the champaign too quickly and if you've noticed some drops, don't panic. More adjustments to this algorithm are necessary and, if you've used solid SEO practices and been consistent and varied in your link building tactics - keep at it and your rankings will return.

Once you know how Google measures or evaluates your links then you will be in a better position to conduct a more effective link campaign. Before I explain the current pattern of link evaluation let's take a stroll down memory lane to see how far things have come.

In The Beginning A link Was The Equivalent Of A Thumbs Up Vote!

The original premise of the internet was to have a bunch of related resources (websites) linking to one another in a natural pattern of progression. Thus someone on a website focusing on gorillas for example would then naturally migrate from that site to one that listed gorilla safaris. Thus quite soon links became (and still are) the standard with which to measure a website's relevance.

The thinking behind this was that the more popular a website was the greater the likelihood that people would link to it; and since people would only tend to link to sites that offered useful information then it naturally followed a large number of links signified quality...at least that was the idea.

The Birth of Link Spam!

Soon enough wily webmasters realized that they could manipulate the linking concept to their own advantage and make a handsome profit while they were at it. Instead of waiting for people to link to their new sites (a process that could take forever) why not form link directories whereby one, for a certain fee, could amass a large number of links in next to no time at all!

Booming Link market

Getting a new website indexed by Google used to be a task of Herculean proportions. Quite often new websites would languish in obscurity for ages, but those in the know realized that the process could be accelerated. By linking a new website to an established website or webpage with a high page rank (typically page rank (PR) 7 and above) that new website could be indexed by Google within days or a matter of hours depending on the PR value of the webpage on which the link was located. However getting a link from a high PR webpage did not come cheap and it was not uncommon for webmasters to fork over $800 for a one month link on a PR8 webpage!

Debut of The Link Farm

The link market trade flourished for a while, making a mockery of Google's system of assessing the importance of any given website or webpage. However, a lot of webmasters in a hurry to see their websites scramble up the search engine indexes could not afford the hefty price commanded by a link from a high PR webpage and thus link farms came into being.

Link farms were the poor man's solution to the hefty priced, high value links typical of high PR webpages. The premise of the link farm was as follows: instead of paying an outrageous sum of money for one link from a high page rank website why not pay a small fee for thousands of low PR links? In essence the link farms abided along the principle of the sum amounting to greater than its individual parts!

The Obsession With The PR Band!

Google thoughtful as ever, made it possible for anyone to determine the relative importance of a website at a glance. This they did by the introduction of the PR band, a small line atop one's browser fittingly entitled with the word "PageRank." The pagerank band scaled from a low of zero (PR0) to a high of ten (PR10). The greater the value that Google attributed to a given webpage the higher its designated page rank. In little to no time at that little green slash (PR band) became the highly effective unofficial publicist for the flourishing link market trade.

Webmasters obsessed over the PR band even though in truth the page rank value of a webpage plays little to no part in determining the position any webpage will attain on the SERPs (search engine index results pages). However savvy marketers used the PR obsession of the day to great advantage...using it as a tool to establish credibility and ultimately sell their wares to the less savvy.

However somewhat on par with the abuse of the linking system, the page rank concept soon became equally defunct. In no time at all the Google index was awash with spam sites topping its front page! Something had to give; and it did!

Fast Forward To Today...New Link Evaluation Parameters!

Oh how times have changed!

The search engine algorithms have gotten so much smarter that even blackhat SEO (shady search engine optimization techniques) these days is more trouble than its worth. With the continued abuse and manipulation of the system Google furiously tackled the issue of how to maintain website relevance and quality in its index in an increasingly spammy world.

Since its embracement by the public, the internet has seen its fair share of SEO manipulation from blackhat techniques such as multiple-blog-creation software following the debut of blogs (principle behind this system was that one could create thousands of instant one-way backlinks through the instant generation of thousands of blogs) to whitehat techniques such as the widespread dissemination of articles through article distribution software or services.

Some of these techniques still have value today while others have been effectively nullified such as the mass generation of backlinks through the creation of instant blogs.

How Google Currently Evaluates Links.

It used to be that if the PR band of your website/webpage was gray then this signified that said webpage had been banned. That is no longer the case. All new websites/webpages start off with a grayed out PR band. This band will remain that color depending on a number of factors before it turns white (indicating that the probationary period is over) and eventually transforms to green with establishment of page rank above zero.

Link Aging Filter / Link Probation Period

To counter the widespread habit of acquiring links for a short-term period, say a month, so as to get a website indexed or attain page rank quickly, Google now subjects every link to a probationary period in which time the link is identified by Google but not accorded any value. Although such a link is recognized by Google, typically it will not be registered as a link associated with the website to which the link points for a subjective period; for that to happen the link needs to mature, and the rate at which a link matures is dependent on a number of factors.

Factors That Hasten Link Maturity Or Reduce Link Probationary Period

1. Keywords: The keyword incorporated in any given link is going to determine how long that link will be under probation. The more competitive the keyword the longer will be the link's probationary period. In reality this link probationary system has superseded the Google Sandbox, which was/is Google's technique of ensuring that super-optimized new sites do not zoom uncontrollably up the SERPs, quickly overshadowing long established websites. With respect to the Google Sandbox concept, if a new website was/is targeting a very competitive market already saturated with millions of sites, then that new website would spend a longer period cooling its heels in the Google Sandbox.

2. Volume of Traffic Across A Link: The more trafficked a link is, the quicker it will attain full SEO-value recognition by Google. This is a relatively new system in play and basically what it means is that a heavily trafficked low PR link will bestow far more SEO influence to the webpage it points to than a little trafficked high page rank link. In essence Google has pretty much nullified the system whereby webmasters could purchase links from high PR webpages in hopes of improving the SEO status of their own site. The application of this system explains why some newer webpages attain PR before older more established webpages on the very same website.

3. Links From Topically Related Sites: A links that comes from a website or webpage that has a comprehensively topical relationship to the destination webpage will have greater value than a link that does not. For example, say your website is about internet marketing, getting a link from another website that focuses on online marketing software would definitely fall under the category of topically related sites.

4. Utilizing Different Keywords In Links: Having the same keyword incorporated within all the links pointing to your site will tend to set off red flag alerts, which means that those links are not going to attain full SEO-value recognition by Google for a longer duration. Another link strategy you should employ is to have your links pointing to some of your inner pages as opposed to all your links pointing to your home page. Having links spread across multiple webpages registers as a more natural link strategy to the Google algorithm and the premise of this algorithm tweak was to nullify the system where webmasters would purchase links from link directories.

Remember anything that appears suspicious to the Googlebot is ultimately going to decrease the effectiveness of your SEO campaign. There're many more factors that play a role in determining how high and how fast your website will make it up the SERPs (Google of course doesn't spill all the beans) but if you conduct your link campaign with these few tips in mind you won't go far wrong.