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this is called PR sculpting and there's mention of it earlier in the thread. Google seems fine with it.
The concern over this becoming an SEO flag IMO is not something that's an issue right now - but absolutely could be used as an SEO signal in the future. For those that think that can't happen, Google shifts the purpose of nofollow every six months, depending on what suits their purpose. And Google's becoming increasingly SEO adverse. Lots of stuff that's bad now used to be either good or OK. So while it maybe hard to imagine them using this now, the idea that they could change their policy if it suits them (or just use it internally, without telling us) is normal behavior for them.
The fact is, due to Google's changing policies on SEO I'm concerned about using this even on my clean white hat sites. I did stuff years ago that would be frowned on now - directory submissions and the odd blog comment. Those links still stand today. My current practices (as always) on my main site would pass muster, but I could get hammered due to past 'ok then but now now' practices. Throw up some nofollow, have Google decide that this is an SEO signal, they check your site, find some stuff you did years ago and BAM! your squeaky white hat site penalized or banned.
No thanks. If joe average doesn't know about it, but it's common routine for SEO folks, I do what makes me look like joe average, not SEO folks. Nobody talks about neighbourhoods anymore?
Many sites use the no follow to hoard pagerank. They try use it on pages such as contact us, about us etc.
Wondering how G feels about this... Is this considered spam or an unethical policy.
I can't imagine why it would be considered spamming or unethical. Why would Google want to crawl and index a zillion pages for keyphrases like "contact us" or "about us"? And if I've got a 2,000-page Web site about red widgets or the life of Nelson Mandela, wouldn't 2,000 "contact us" links that pass PageRank simply be a distraction for Google when it's trying to figure out what's important on the site?
No thanks. If joe average doesn't know about it, but it's common routine for SEO folks, I do what makes me look like joe average, not SEO folks.
I couldn't have said it better myself! Or could I? ;)
Nobody talks about neighbourhoods anymore?
Yes they do! Its called Social Media!
Seriously folks, look at the history of nofollow and why it was agreed upon by the major three. There was a specific reason for it; to deter comment spam, period!
If that nofollow appears anywhere else outside of "user-generated" content, that is a signal, neither good nor bad until investigated by one of Google's 10,000+ Quality Reviewers and/or staff depending on how "loud" the signal was.