Google uses links from websites as an integral part of their ranking mechanism. It is easiest to think of links in the same way you would associate words to describe a person. For example, often when people speak about Einstein, the first words that will come to mind are “genius, physicist, e=mc2.” Similarly, when pages “speak” of other pages, they do so with links, and when certain links are louder than others in the chatter, those are the keywords which are associated with the other pages.
Now, some pages are more important than others. For example, the main page of Google has a much higher value than, say, the website of Bob’s Bicycle Barn. As a result, a link from Google’s index page with a certain keyword counts far higher than a link from the latter. That being said, a high number of links still counts as strong currency in Google algorithm today. The reason Google’s index page is more weighty is because of the number of other pages that are linking to this page. You can think of this as a matter of tiered links coming in from different sources.
The process used by Google to sort out various websites based on their respective relevance depends on the bulk of links that come from other sites. For example, let’s talk about Wikipedia, a Google favorite. The reason Wikipedia is right on top is because so many other websites point to Wikipedia as an authority on a multitude of topics. The sites that link to Wikipedia are backed by other sites and thus create a tree-shaped linking structure. This type of linking structure is known as Tiered Link Building.
When you are seeking to rank your website for keywords with Google, it helps to use a Tiered Link Building structure. That means creating a three- or four-level structure of links, like building a house. Put your main website that needs to rank for a keyword right on top, and then have other websites link towards it, as if they were the foundation pieces for your house. Ideally, you should have about three levels of links pointing towards your site. Think of it as: tertiary links, secondary links, primary links, main website.
This is an excellent format when it comes to increasing the page rank of the main site since, with the increase of page rank in each tier, the tier ahead of it also improves. Hence, the main site gains a higher rank.