The PageRank algorithm calculates the importance of web pages based on the structure of incoming links. It models a random web surfer that randomly clicks on links, and also occasionally jumps to a random page. Pages are given more importance if they are linked to by other important pages. The algorithm represents this as a Markov chain and computes the PageRank scores through an iterative process until convergence. It has the advantages of being resistant to spam and efficiently pre-computing scores independently of user queries.