I found this graphic by SEO book that walks through how Google shapes the web and thought it was very informative. Luckily, they made it available for an easy embed and so I have placed it below.
The main point that I would want to make about it, is that no matter how hard you try to game the system or make shortcuts, you eventually will get caught and penalized. Everyone who has tried shady techniques to gain search engine rankings has been caught and when they are the results can sometimes be rather harsh. if you don’t believe me, just ask JC Penney and content farms. If you want your site to rank well and bring you business, there is really only one true proven way: Work hard at generating your own unique content that is valuable to your business. Don’t pay others to create links, don’t buy generic content, and don’t scrape it from somewhere else.
How Google Shapes The Web:
Click on Image to view full size.