In short, it explains how Google may determine the value and ranking of your web site based on the who you link to and the reachability of those sites you are linking to. By reachability they mean the user interaction on the web sites you link to.
How is the reachability score calculated? Bill explains three points:
1) Google might begin by identifying secondary resources that are reachable through one or more links of a primary resource, where the secondary resources are within a number of hops (clicks, gestures, etc.) from the primary resource,
2) An aggregate score for the primary resource might be calculated based on the scores of the secondary resources, where the scores for those is calculated based on prior user interactions with the secondary resources,
3) That calculated reachability score can impact the ranking of the primary resource in search results.
So clearly based on this patent document, Google cares about the quality of sites you link to. Google is able to measure those site's reachability and your site's reachability.
Forum discussion at WebmasterWorld.
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