Editor's Note: While we at SEOmoz feel this is an excellent subject for discussion and has already brought out some fantastic examples of what to do and what not to do (see the comments), we don't explicitly endorse all of the tactics described herein; please be cautious when using nofollow for link accumulation and changing anchor text of internal links in navigation and footers (see this post on internal links and this one on PageRank Scultping for more). And finally, a big thanks to Charlotte SEO for the contribution.

Placing the NoFollow link attribute on your website is a very important SEO factor for on-page optimization. Getting backlink juice to websites isn't that easy for everyone, so we need to make sure the juice flow is flowing properly.

I read a blog post last month demonstrating that a website is a balloon filled with water. Every link that does not contain NoFollow is basically someone sticking a needle into the balloon, which creates a leak. Imagine having 10 links on your page.....that's 10 leaks you need to stop! Your homepage pointing to your blog is not a leak. You WANT the juice to flow towards your blog. The leaks happen when you don't know about juice escaping to pages that should not be receiving juice. Not only are these leaks giving away juice, they are also being labeled with an anchor text.

Here are some examples of link juice leakage:

• Login/SignIn/Signup Links - Do you have a nofollow on this? Why not? There is no vital information on these pages. It's just a user function.
• Register - Same as above
• Logo/Header Picture - Unless you get customers by images (tangible products), what would be the point of not putting a nofollow?
• RSS feeds - Can create duplicate content. You want the search engines to index your blog posts, not your feeds. 
• Tags, Archives, Category pages - They all contain your blog post. That's at least 3 extra pages with duplicate content, AND your juice leaks.
• Contact Us - Does this contain vital info that needs to be indexed? Normally, it's a form that needs to be filled out. 
• Copyright/TOS/Privacy/Feedback - These pages do not contain relevant information to your website, and should not be indexed.
• Comment - Juice should stay in your blog post, and not going to comment pages.

Now here are some examples of leaks that contain the WRONG ANCHOR TEXT

Read More/Learn More/Read Full Entry/Permalink - Let's suppose I want label a page with 'Auto Finance' and the link to that page is example.com/auto-finance. It makes sense to put the anchor text as Auto Finance, but it doesn't make sense to use Read More as the anchor text. If you are using these anchor texts, you're leaking juice AND using the wrong anchor text.

Here's an example of what it looks like. I bolded the parts that would be links.

• title link: Auto Finance
• blog post: Auto financing has gone down due to the economic depression....
• Permalink/Read More/Learn More/Read Full Entry

Most websites will have at least 3: the title link, permalink, and Read More link. That's 3 links going to the same place, and 2 with the wrong anchor text. The name of the page is Auto Finance, not permalink or read more. If you have 5 blog posts on the homepage, that will be 10 extra links! 

There are a lot more places where you need to put nofollow, but I saved the best for last.

Your 'Home Button' (if you have one)

The Home button is also an anchor text that leads to the homepage. Unless you're selling a 'home', you need to put a nofollow on this. By using the anchor text 'home', you're telling the robots that your homepage's title is Home....when it should probably be a keyword.

The home button was created for the 'users' so they can find the homepage. It is a user function (created for users, not robots).

1. Changing the Home text to a keyword. If you do auto finance, then you will take out the word Home and put in Auto Finance.
2. Placing a nofollow link attribute. Most people ask, "How are the robots going to find the homepage?" Easy. Place a link with a nice keyword on your footer. Just like the home button, the footer appears on every single page of your website. :)

Look at your website and determine if the pages/links are for the robots, users, or both.