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Sites seem to be passing on less Pagerank since the update. I have found a few PR7s linking to PR5s for example, with only a few links on the source page.
Backlinks seem to have dropped too. This might result from a general lack of pagerank being passed around.
Could Google have tweaked the damping factor? Googleguy intimated something was up with Pagerank in his pre-update announcement.
I think that jimbeetle's idea makes sense. As Google index deeper (especially 'dynamic' looking URLs), PageRank distribution may make sense.
Also, as the Web matures the difference between well linked sites and poorly linked sites is likely to increase. The bigger the pond, the greater the range of fish sized expected.
I'm not a biologist, I mean fish and pond only in the context of site and Web.
The effect of changing the dampening factor is very complicated to estimate since the whole scale will change, e.g. the maximum PR (one of the two points which fix the whole Toolbar PR scale) decreases. A general rule would be that a large number of links gets more important while a single link from a high ranking site gets less important. However, I would expect to see more drastical changes if the damping factor was increased significantly.
As mentioned before, a change in the Tollbar PR can be caused by
- a decrease of the PR of some pages linking to the site
- a decrease of transferred PR through additional links on pages with backlinks to the site
- a change in the PR algorithm
- a change in the Toolbar scale (The Toolbar PR is the relation to the most important page. Therefore, a change of the PR of this page - caused by additional links to this page - can lead to a drop of the Toolbar PR)
(I am still trying to find out if Google has modified the algorithm in such a way that not all links on a site get the same weight. But I will get no results before the next update.)
Mainly I wanted to mention expired domains to explain why people might see some differences in PR and the number of reported backlinks this month.
Of course, that doesn't mean the dampening factor couldn't have changed as well...
I'm not sure exactly when it happened, but I noticed when I checked my rankings after this recent Google update that the PR for a number of category pages in the Google directory dropped appreciably. One that used to be a PR7 is now a PR4. One that was a PR5 for a long time is now a 3, one that was a 6 is now a 4, and so on.