Using Nofollow tags
NoFollow tags are a great resource given to us by first Google and then supported by the other search engines. They give automated message boards, blogs, and other social media power to say that links are not trusted but the site that posted them. There is some question about whether the Search Engines still follow them to see what you are linking to.
I would say if you want to be safe only use them when you have to. If you no follow a link to a site you may need to ask yourself if you should link to that site. It is best to leave the nofollow tag for blogs, forums, wiki, and automated outside people driven websites if you can help it.
Don’t think that you can get away with doing a link exchange with someone and putting the nofollow tag on your link to them. You may be insulting Google’s intelligence and ability to see that semi-reciprocal link. This nonsense will catch up with people who use it if it is not already being seen and calculated into their algorithm.
If you need to use the nofollow attribute just put rel=”nofollow” inside your a tag.
Deep Thoughts — Would it hurt your site to use a nofollow tag in a link to Google? Would it help you with Yahoo or MSN?
Let me know how you use the Nofollow tag. More discussion on nofollow tag.