I recently stumbled across this post by Matt Cutts of Google which gives an in-depth view of how Google PageRank is affected by rel=”nofollow” links.
I have seen a lot of advice from SEO consultants recommending the use of “nofollow” on links to prevent Google leaking your PageRank out to other web sites and therefore concentrating the passing of PageRank to other pages on your site.
For example, if your page had 10 PageRank points and 10 links to other pages, 5 of which were set to “nofollow”, the other 5 pages would each carry a PageRank of 2 points (ie share the full 10 points between the 5 links).
It would seem from what Matt says that this isn’t exactly how Google works. Sculpting the links on your page to concentrate link traffic to other pages does not equate to a concentrated amount of PageRank being passed to those pages.
In the example above, adding “nofollow” does prevent PageRank being passed through those links but the other 5 links will still only receive 1 PageRank point per link.
In general, Matt suggests whenever you’re linking around within your own site don’t use “nofollow”. Only use “nofollow” on links when you do not want a page to be indexed by Google, or for external links of which you may not have been able to verify the content (for example, a link added by a commenter on your blog).
If that makes no sense, Matt explains it much more clearly…