The text of links are treated in a special way in the search engine

The text of links are treated in a special way in the search engine. Most search engines associate the text of a link with the page that the link is on. In addition, we associate it with the page the link points to. This has several advantages. First, anchors often provide more accurate descriptions of web pages than the pages themselves. Second, anchors may exist for documents which cannot be indexed by a text-based search engine, such as images, programs, and databases. This makes it possible to return web pages which have not actually been crawled. Note that pages that have not been crawled can cause problems, since they are never checked for validity before being returned to the user. In this case, the search engine can even return a page that never actually existed, but had hyperlinks pointing to it. However, it is possible to sort the results, so that this particular problem rarely happens.

A Really Good Article on PR Calculation on Google
An excerpt from Computer Science Department, Stanford University, Stanford, CA 94305

A Really Good Article on PR Calculation on Google and Another Excellent Article

This idea of propagating anchor text to the page it refers to was implemented in the World Wide Web Worm [McBryan 94] especially because it helps search non-text information, and expands the search coverage with fewer downloaded documents. We use anchor propagation mostly because anchor text can help provide better quality results. Using anchor text efficiently is technically difficult because of the large amounts of data which must be processed. In our current crawl of 24 million pages, we had over 259 million anchors which we indexed.

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