A search engine helps users find the things they’re looking for online. The user types a word or phrase, called a query, into the search engine, which then displays a set of results that are relevant to the query.
Most search engines provide two types of results listings in response to the same user query: organic (also called “natural” or “free”) listings, and paid listings (i.e., advertisements). Google keeps these two types of listings separate, and ads are noted by the phrase “Sponsored Links” appearing above them.
Most search engines rank the results within each type of listing — in other words, they determine in what order to show the listings on the results page — according to how relevant the result is to the user’s query, with the most relevant appearing at the top of the page.
Each search engine calculates relevancy in a different way for each type of result (organic and paid). This is one of the main differences between one search engine and another, and it’s a factor in many users’ decisions about which search engine to use.
On Google, although both organic and paid results appear in response to the same user query, the results are independent of each other. The ranking of an organic search result has no bearing on the ranking of any ads, and vice versa. This makes it possible for an advertiser to perform well in the paid listings and have an ample online presence, even if their site isn’t present in the top organic search results.
In Google’s organic results, relevancy to the user’s query is determined by over 200 factors, one of which is the PageRank for a given page. PageRank is the measure of the importance of a page based on the incoming links from other pages. In simple terms, each link from site A to a page on site B adds to site B’s PageRank.
Google AdWords also uses a combination of factors to rank paid listings, which will be explained in depth later in this lesson.
Article courtesy of Google (https://adwords.google.com/support/aw/bin/static.py?hl=en&guide=23303&page=guide.cs)