I have a network of 200 Wordpress blogs, and each of them has 200 links to all the other sites on a sidebar (rel="nofollow"). I am getting some traffic to the other sites, but I am not sure if I am not getting penalized by Google (and other search engines), and what kind of effect does it have on SEO performance of my sites (out of 200, only about 15 is within first 100 pages of Google, websites are regularly updated etc). It looks like something is weighting on the sites down, and I am wondering if it is not the sidebar with links.
I know that the list of links is not very good for SEO. What would be the best way to keep it in place, and get around the issue at the same time? Make a list of links in Flash, make an iframe and set it to <meta robots="noindex, nofollow"> (I can't set individual links to noindex, the command works only with a meta tag)?