I would argue that it is on some levels. I can’t see that Google would keep it going as a system if it were not.
Their PR updates come every couple of months usually and must take significant energy and resources for them to do.
I doubt they’d do this just to keep us believing they still used it. It must have some usefulness to them.
I keep an eye on my blog’s page ranks because it gives me some sort of indication as to how important Google thinks they are.
It may not be directly linked to traffic but it gives me an indication if I’m on the right track to improving quality which I believe eventually leads to more traffic.
PR is also important to me because it also helps me monetize my blogs. On a number of my blogs I sell text links to other site’s operators. One of the few ways that seems to be used to judge the worth of a site for such purposes is Google’s PR.
As a result if I see one of my blogs promoted from one level to another it’s a cause for a mini celebration.
I guess in addition to this it’s good for the prestige and reputation for your site to be highly ranked.
Whilst most of the above is just opinion and speculation - it’s about as good as I can do at this point and comes out of experience.
I’m sure there is ALOT more to it than I’ve mentioned and that Page Rank is one of those things that Google is constantly monitoring and adapting as they themselves learn and observe patterns on the web
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