Matt Cutts says No follow links won’t hurt search rankings in Google

No follow links serve as the main purpose of generating traffic. What happens if you have many nofollow links? Does that have negative impact in your site?

“No, typically nofollow links cannot hurt your site – so upfront, very quick answer on that point,” says Matt Cutts “That said, let me just mention one weird corner case, which is if you are leaving comments on every blog in the world, even if those links might be nofollow, if you are doing it so much that people know you and they’re really annoyed by you and people spam report about you, we might take some manual spam action”

Here Cutts points out blog comments as an example for nofollow link as it is practiced in large scale throughout internet. In case if you are spamming in large scale, then Google may take manual action despite of nofollow links. In general nofollow links have no effect on rankings until you don’t annoy the entire web.

Ref: https://www.youtube.com/watch?feature=player_embedded&v=QSEqypgIJME

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