The subject of linking out to other sites is confusing to many webmasters. Should I link out? How often? nofollow or not? etc. I've been testing the following rules of thumb on an 18 month old site with some success.
Rules of thumb
#1 - Always link out when a link is due
#2 - Limit the number of situations that require an outbound link
#3 - Link to the highest quality sites possible
#4 - Never use nofollow, it's a Google only thing with undisclosed ramifications
#5 - Forget about link text, always use the url so there can be no doubt of intent (e.g. the link text would be example.com if a link is aimed at example.com)
Just those first five rules have served me well, here is how I limit outbound links. I let Google tell me.
#6 - Limit the number of outbound links to ONE per 250 Google visitors.
Let that sink in for a moment, the amount of linking out is directly tied to the traffic Google is sending. Thus a new site will not link out, it cannot afford to. A site with 500 visitors per day will only have two outbound links, hopefully both of extreme quality sites, etc.
Why does #6 work? Every outbound link results in an evaluation so having a limited number of only the highest quality links available is safe.
#7 - Don't add links to older pages when you have one or two outbound link slots available. Instead find the pages that are receiving the traffic and create new supporting content for those pages and within that content incorporate a link to an authority on the subject. Links must exist from the moment a page is released to avoid upsetting the balance Google has about your site.
That's it, 7 simple rules that are working for me on one site I am testing. I'd love to hear your thoughts, good idea? bad idea? impending doom?
Highly subjective, I'll be the first to say that this system is highly subjective to several things. Firstly it may not appear natural, it is sickeningly calculated. Secondly the impact of outbound links is tied to the effectiveness of your internal link structure. If too many outbound links occur in the wrong places the structure can become weak in terms of trust/rank flow (which some say doesn't exist).
Whatever Google thinks, I find comfort in the practice. I would never overspend my bank account or over eat in my diet so why should I not be weary of my link equity? Some are required but too many of anything is bad, right?
note: I had originally planned on keeping track of inbound links and trying to ensure a balance between inbound and outbound but decided against it because the only true measure I care about is traffic. I haven't decided if I will do this with my bigger site yet and I certainly don't advise going into an older site and removing links.
