Silvery - 8:12 pm on Mar 16, 2010 (gmt 0)
I think this black-or-white perception of a directory with outbound links is naive on the part of the SEO company.
It's understandable that they have this perception, because the historical PageRank algorithm would have functioned in this manner. With the old PageRank, linking out more than you are linked-to might have indeed resulted in you retaining less PageRank than ideal.
HOWEVER, there's quite a few things which have been added to Google's algorithm over time. For one thing, search engines have long considered both Hubs and Authorities to be generally good types of websites. An Authority is linked-to by well-known Hubs and related topic sites. A Hub links out to good-quality sites.
So, your site sounds like a Hub. In that respect, it's not bad at all that it links out to other websites.
Further, Google has indicated that it's a bit suspicious or undesirable for a site to *not* link out.
If your SEO company's advice were sound, then directory sites like DMOZ would have zero PageRank, because they likely link out a lot more than they're linked-to.
So, here's my recommendation (as someone who managed a very large local info directory):
- If you have a process to check the outbound links in your directory to make sure they're good quality (not #*$!, not malware, not errors, not expired domains), then link out to them using simple, plain links. If your site is an information resource, doing this will show you are a good quality site.
- If you don't check pages you link-to, and don't validate the links on a periodic basis to make sure they haven't gone defunct, you could add Nofollow to the links. This is precisely what the Nofollow protocol was developed to address. This would say that you merely do not endorse the pages you link-to.
- Your SEO company is recommending that you use a somewhat arcane method to trick search engines into leaving ranking weight within your site rather than transfer it outside. Being too greedy in this way may have you undermining your goals, since Google indicates that sites which don't link out at all may appear suspect. It's more desirable to build your site to appear natural, well-formed, and of high quality than to appear to be trying to manipulate PageRank overmuch. Overdoing it is called "over optimization", and it's considered riskier.
Building well and naturally will be more sustainable over the longterm.