Each visitor to your site enters via a link indicating where they clicked from, the keywords they used, if any, as well as campaign and medium information. Google Analytic parses the link to obtain this information.
The information is gathered by the tracking code installed on each of your web pages. You can add the code manually into each web page, or automatically using server side includes and other template systems. Once installed, the tracking code is triggered each time a visitor views the page. Analytic tracking code performs three tasks:
1. it ensures that a page hit is registered even if the page was cached or proxied,
2. it parses the link to gather your campaign information, and.
3. it updates visitor activity information.

Google and most other search engines use links to determine reputation. A site's ranking in Google search results is partly based on analysis of those sites that link to it. Link-based analysis is an extremely useful way of measuring a site's value, and has greatly improved the quality of web search. Both the quantity and, more importantly, the quality of links count towards this rating.

However, some SEOs and webmasters engage in the practice of buying and selling links that pass PageRank, disregarding the quality of the links, the sources, and the long-term impact it will have on their sites. Buying or selling links that pass PageRank is in violation of Google's webmaster guidelines and can negatively impact a site's ranking in search results.

Not all paid links violate our guidelines. Buying and selling links is a normal part of the economy of the web when done for advertising purposes, and not for manipulation of search results. Links purchased for advertising should be designated as such. This can be done in several ways, such as:

Adding a rel="nofollow" attribute to the <a> tag
Redirecting the links to an intermediate page that is blocked from search engines with a robots.txt file
Google works hard to ensure that it fully discounts links intended to manipulate search engine results, such excessive link exchanges and purchased links that pass PageRank. If you see a site that is buying or selling links that pass PageRank, let us know. We'll use your information to improve our algorithmic detection of such links.