Do outbound links drain ranking?

[Graham Wellington]

On a certain site I want to place outbound links for my visitors that are related to the site's niche. Assuming no link exchange is done, will this be detrimental to my google ranking? Everyone knows inbound links give rank, but do outbound ones drain it away?

[dataguy]

We do a substantial amount of testing. Our testing is only for our sites, so it is not definitive and will not apply everywhere, but does apply to us.

This being said, we have expected to see outbound links drain ranking, but this has not happened on any of our tests. For whatever reason, 'PR hoarding' or 'Link Funneling' just doesn't seem to work the way it is often reported.

As for the use of nofollow, the most detrimental effect that we've seen from its use is that it makes a lot of SEO types really mad. This, of course, is not always a bad thing.

There is evidence that would suggest that using it on a small amount of outbound links (less than 10%) could hurt a websites rankings overall. Using it on nearly 100% of outbound links does not seem to have the same effect. My guess is that using it sparingly could be seen as over-SEO'ing but using on all outbound links is not as it is the default setting on alto of CMS/Blog software.

I personally don't think Google has been consistent in explaining when to use nofollow, just like they have not been consistent in explaining when "link building" is ok and when it is not.

My $0.02 worth, if it's worth that much...

[Kirby]

If one should not use the no follow, why not?

no follow was proposed as a remedy against blog spam. It is a misnomer. As Tim Mayer of Yahoo stated, it should be called "not trusted" because the engines do follow it, but presumably they discount its worth. That said, I have even seen no follow links show up as backlinks with Google.

Assuming the engines treat it the same is not a safe bet.