Does Google use the bounce rate of a webpage in their algorithm?  If so what does this mean to your website and can you improve your bounce rate?

The bounce rate of your website is what that see only one page of your website and the percentage of visitors who spend a small period of time on your website. What this does is help figure out the quality of the traffic that your site receives.

Google Analytics documentation defines the bounce rate as such:

"Bounce rate is the percentage of single-page visits (i.e. visits in which the person left your site from the entrance page). Bounce rate is a measure of visit quality and a high bounce rate generally indicates that site entrance (landing) pages aren't relevant to your visitors."

Google can determine the bounce rate via their toolbar and their analytics. As is typical with Google’s algorithm we don’t know how big of a role the bounce rate plays.  But Google views a high bounce rate as a sign that the viewer is visiting a low quality page, which tells Google that what the user was looking for is not what they found.  So what you need to do is improved the contents and the usability of your web pages, and thus you might lower your bounce rate.