There are many possibilities for how PageRank has changed since it was published. This is one way that Rand and Nick believe it may have changed.
So, a page begins with a certain amount of link juice. There is a dampening factor, say 0.15, to account for a random surfer site that just clicks off the page. Then, each link on the page is assigned a probability. For example, if there a four pages, each has ¼. Therefore, each link will get the weight in ¼ increments minus the dampening factor.
However, some of those links are internal, between pages on the same site. The search engines look at this, and assign greater importance to the external links than the internal links as they are more likely to be an editorial endorsement.
Google has sources to collect information to create and keep bettering their predictive model, including Toolbar, Google Analytics and Wifi sources. This means the model is not a static formula, which makes it difficult for SEO’s to keep up with.