PageRank was developed by Google founders Larry Page and Sergey Brin at Stanford. In fact the name. PageRank is a likely play on Larry Page's name. At the time that Page and Brin met, early search engines typically linked to pages that had the highest keyword density, which meant people could game the system by repeating the same phrase over and over to attract higher search page results. Sometimes web designers would even put hidden text on pages to repeat phrases.
Meanwhile, the link spam began. People chasing higher PageRank scores began dropping links wherever they could, including into blog posts and forums. Eventually, it became such an issue that demands were raised that Google itself should do something about it. Google did in 2005, getting behind the nofollow tag, a way to prevent links from passing along PageRank credit.
When the ad spot is part of a search engine results page (SERP), the automated auction takes place whenever a search for the keyword that is being bid upon occurs. All bids for the keyword that target the searcher's Geo-location, the day and time of the search, etc. are then compared and the winner determined. In situations where there are multiple ad spots, a common occurrence on SERPs, there can be multiple winners whose positions on the page are influenced by the amount each has bid. The bid and Quality Score are used to give each advertiser's advert an ad rank. The ad with the highest ad rank shows up first. The predominant three match types for both Google and Bing are broad, exact and phrase match. Google also offers the broad modifier match type which differs from broad match in that the keyword must contain the actual keyword terms in any order and doesn't include relevant variations of the terms.
For search engine optimization purposes, some companies offer to sell high PageRank links to webmasters. As links from higher-PR pages are believed to be more valuable, they tend to be more expensive. It can be an effective and viable marketing strategy to buy link advertisements on content pages of quality and relevant sites to drive traffic and increase a webmaster's link popularity. However, Google has publicly warned webmasters that if they are or were discovered to be selling links for the purpose of conferring PageRank and reputation, their links will be devalued (ignored in the calculation of other pages' PageRanks). The practice of buying and selling links is intensely debated across the Webmaster community. Google advises webmasters to use the nofollow HTML attribute value on sponsored links. According to Matt Cutts, Google is concerned about webmasters who try to game the system, and thereby reduce the quality and relevance of Google search results.
Another excellent guide is Google’s “Search Engine Optimization Starter Guide.” This is a free PDF download that covers basic tips that Google provides to its own employees on how to get listed. You’ll find it here. Also well worth checking out is Moz’s “Beginner’s Guide To SEO,” which you’ll find here, and the SEO Success Pyramid from Small Business Search Marketing.