The nofollow attribute for links has evolved from a way to fight blogspam to a power SEO tool. But its days in that capacity may be numbered, according to Matt Cutts, head of Google's Web Spam team.
When it was first launched in January 2005, the nofollow attribute was described as a tool for site owners to identify potentially untrusted external links, such as blog comments. The idea was that search engine crawlers would not follow that link, not count it in calculating PageRank of the destination page, and not count the anchor text when determining relevant keywords for that page.
By 2007, advanced SEOs realized that the nofollow attribute could be used internally in PageRank sculpting. Using that process, the nofollow attribute is added to links to certain pages to prevent PageRank from flowing to those pages. The way it used to work, the PageRank that was saved from those links would be distributed among the other links on the page.
Here is where Google has changed the way it handles the nofollow attribute, according to Cutts.
This week at the SMX Advanced conference in Seattle, Cutts joined the discussion around nofollow during the duplicate content session. According to Outspoken Media's Lisa Barone: A debate broke out mid-session when Matt Cutts got involved about whether or not nofollow is still effective. Of course, as soon as it got hot, all search representatives got very tight lipped about who said what and what they really meant. As far as I could, Matt Cutts did NOT say that they ignore nofollow, but he DID hint that it is less effective today than it used to be.
Later, Cutts addressed the issue again in his You&A keynote. When asked about PageRank sculpting, Cutts said that it will still work, but not as well.
Basically, using nofollow will still prevent PageRank from passing from the linking page through the nofollowed link. But that PageRank is no longer "saved" to be used by other links on the page. It just "evaporates," according to Cutts. Rand Fishkin at SEOmoz has some visual aids to help describe the process.
This change mainly affects those SEOs that have tried to optimize their pages using the nofollow tag for PageRank sculpting. It's safe to say that most site owners have no idea what PageRank sculpting is, which is probable a good thing, since it can quite easily be done wrong and cause more problems than it solves.
A bigger problem arises for those who are using it for its original intention, blocking comment spam. Under the new rules, a blog post that allows URLs in comments will lose most of its "link juice," since there will be many links on the page using up PageRank, but not passing it on. If there are two links in the post, and 98 links in the comments, the links within the article will be devalued, passing only 1/100th of the PageRank, instead of the 1/2 they used to pass.
Google has said all along that the benefits of PageRank sculpting may not be worth the time involved to do it. Cutts wrote on his blog last year, "if you design your information and site architecture well, it's not something that you need to worry about at all...there's an opportunity cost to sculpting and that the vast majority of people would get more benefit from spending their time working on making their site more compelling (so they got more links/PageRank) rather than obsessing about how to move around the PageRank that they have."
So there you have it. As Cutts himself Twittered this morning: "Hey, did you hear our latest inside tip? Make relevant content. ;)"