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That was pre- Site Explorer, but it still appears to hold at least somewhat true.
perceived quality of the site
Hmm...perhaps the sort of rank by perceived quality of something (page or link, maybe) but IMHO not the "site."
Some blogs link to my sites from every page, and Yahoo Site Explorer lists these as hundreds of distinct links. About 90% of every page (in Yahoo site explorer inlinks) are these blog links -- the other links are sort of sprinkled throughout.
If the links were ranked on quality of site these blog links should appear in a given range, not scattered throughout.
Way back at one of the PubCons, Y!'s Tim Mayer, when pushed on that same question, cringed and answered with a (paraphrased), "Yeah, kind of, maybe, possibly for the first so many, take it as you think you see it and for what it might be worth."
That is a great characterization of that moment. I have thought often about his response to that question and genuinely canít decide if he just didnít want to answer the question or he just wasnít sure of the answer.
(if you ever get a chance to go to one of these things its well worth it just to see the difference in demeanor between the Yahoo, Google and MSN people. The Google people look like their genuinely having fun, the Yahoo people look like their sitting in a dentist chair, and the MSN people look like they just donít know what to make of it all)
It does seem to make some assessment of the strength of the page/site link is coming from. It also seems to factor in the number of outgoing links on the page. So a weak page, with very few outgoing, can be higher on the list than links from a stronger site with hundreds of outgoing.