SEO's are scurrying about this morning trying to figure out the meaning behind comments made at SMX yesterday regarding Google treating the practice of PageRank scuplting differently that it has in the past. While it's a bit early in the ongoing conversation to form any definitive opinion, one thing is very clear. This is a pretty sizable departure for Google from its previous treatment of the nofollow tag.
Before you run off and strip all nofollow tags from your site, let's look at what these changes represent - and what they don't.
Nofollow still stops the flow of PageRank. The difference today is that SEO's aren't adding more PageRank into the pot by engaging in PageRank sculpting. The same rules still very much apply - nofollow a link because you don't want it to rank, not because you want other pages to rank.
PageRank Sculpting did work in terms of increasing the number of links across your site pointing to important pages. You can still add more links across your site to pages that you want to have more PageRank. This will still work, but your new limitation will be on what you think is acceptable to your Users, not some crazy PageRank calculus where you are trying to optimize the PageRank flow by sacrificing other links.
There's really nothing that is required for the majority of sites as not doing something is hardly an actionable item. The only sites that are affected are those which were playing favorites with internal pages, willfully sacrificing some long tail traffic to artificially benefit a few more important pages.
I would encourage readers to continue using the nofollow - but appropriately. For example, use nofollow to flag untrustworthy links. In some cases, you can use it to devalue content but it will not increase the relative value of other content on your site.