Nofollow is a way for website owners to instruct search engine bots and spiders not to follow and pass page rank (PR) on certain links. This method can be applied to individual links or to an entire page. By using the attribute rel=”nofollow” in your html links, you can control the PR flow within your website and the value that it passes to external websites and website pages.
PR (Page Rank) flows into a website via inbound links and it flows out via outbound links. The nofollow attribute is a method to help redirect the flow of page rank. By using this method and if you only have a couple of links on a page, the more page rank share each link gets. By applying the nofollow method to 15-25 links on a page, you will effectively reduce the ranking flow to 5 links.
The nofollow method allows webmasters to concentrate page rank to the most important web pages within their site. To give you an example: the contact us page is important for business communication, but not for the search engine rankings.
By adding the nofollow attribute to the links pointing to this page, you can focus the page rank on pages that are rich in keywords and content. This is way on how you can sculpt the flow of page rank to the most important pages on your website. You can control the link architecture of your website.
The nofollow method allows the shaping of the overall importance and relevance of your site. This can also help you to focus the relevance to a single topic. You can effectively “guide” the search engines to which of your web pages are the most important.
View the Google Webmasters Guidelines on using the nofollow attribute.
Does using the nofollow attribute to a link guarantee that the link will not be indexed by the search engines? No, Google is clear that it won’t eliminate the indexing but it will control the page rank.