Perma link is a permanent link that specifies the definite web page with a URL. It remains unchanged, simple and understable by user. Permanent link is created as the single web page which will have many temporary addresses. Google treats each URL as a separate page and the analytics report which we get for the same page content will be different and the competition occurs within same web pages affects the page Rank. The fixed URL may not be understandable and difficult to remember, hence URL redirection is done.
By default the link will be “Ugly” as http://example.com/?p=N where N is the post Id number and it’s not appealing and in understable format. Using mod_rewrite you can produce much simpler Permalinks as http://example.com/2012/post-name/. mod_rewrite take the URL and place in a .htaccess file and allow the URL to rewritten in a spiderable format. It converts the URL in one format to another that helps to be indexed.
Permalink which another weblogger use to link to your site or article, likely used for Blogs. When a user posts newly on blog then it automatically gets its own URL and can be used it separately than linking to the main URL. If you wish to custom different from Title then can be done in post settings by clicking on the custom URL option and mention the URL need to given in the tab.
Permanent links helps in link building process as Backlinks are linked to the primary domain and also to link within the website.
To shorten URL’s and easy to track the clicks and statistics
Understandable and helps easily to remember.