Cutts reveals how to use Nofollow in your link building.
In a recent video by Matt Cutts, the question came up of how no-follow, outbound links affect long-term SERPs and whether Google has a policy of penalizing sites that only link out with nofollow tags. He answered the question clearly enough by saying no, not necessarily. However, reading between the lines, we can see a little glimmer on how Google actually looks at nofollow links on a site.
On March 7th, Matt Cutts discussed a question from a viewer regarding nofollow use. In light of the recent Farmer Update, people are notably skittish on how they link to other sites. The question is stated as:
As many webmasters are linking only in nofollow, killing the natural way of links, do you think Google will penalize people who only link out with nofollow attribute in the future?
Matt's answer on the nofollow attribute starts clearly enough, stating that it's a website owner's right to link to whomever they want -- and if they choose not to link to anyone (in essence, take only links in and not follow any out), that's their prerogative.
However, if we listen to his words more closely, he says: "If they choose not to participate in the conversation...they might not provide the user a good experience...linking to sites that are good for users as well..."
Maybe we're parsing words, but to us it sounds like one factor of user experience is how many quality sites overall you link to without the nofollow. In this we can hear echoes of quality links both in and out of one's site.
A little later in the video, Matt also addresses that this is considered a webmaster trust issue with the site receiving a link, and that "over time" the webmaster trusts the other sites and removes the nofollow from the link.
This is a very critical clue to how Google is assessing outbound links. The problem, and the cause of the Farmer Update, was poor quality sites being linked to virtually overnight by a slew of larger-scale and trusted sites, both inbound and outbound. What this statement sounds like to us is that Google is checking to see if you allow a certain percentage of links to other sites to gradually evolve into straight, outbound links instead, but beginning with a nofollow on non-authoritative sites.
Handling your link strategies is a constant gardening effort, but this is one new wrinkle in how you tend to them. Listen to the video and make your own assumptions, but listen carefully. Matt is a good and intelligent resource, and we believe he is sending a message on how good link building over time will reap the biggest reward and avoid the most penalties.
Google Optimization 
/ 4 
