There is a lot of talk over nofollow links and how search engines interpret them. In a nutshell, when Google sees a no follow link, it does follow the link but it does not index the content of the page or passes any page rank or link juice to it. In other words, Google considers the linked content irrelevant.

There are two ways to find out if a link is nofollow.

a. Check its page source.
You will have to do this manually by loading the website in your browser. Then, click the right mouse button.

b. Use a Firefox add-on, such as Status search.
You can install this tool in your browser. Once enabled, it will show you which links on a certain page are nofollow.

When is the best time to use nofollow links?

1. On sponsored links and advertisements. Advertisements and sponsored links will not always be relevant to your website's content so it's better not to follow them and let advertisers know – if you must – why.

2. On comments. Comments usually throw up tons of unrelated links. If you are very much concerned with keeping your authenticity, put nofollow on your site's comments. You will not get as many comments if you do this but you can also keep out spam better.

3. On information or pages you do not want to appear in Google. If your website has duplicate content or files like pdfs that you do not want indexed by Google, use nofollow wisely.

4. On external links which are not related to your website's content. If you are linking to certain sites for reference, take the time to check if their content complements or matches yours. If they do not and if they also show signs of being from a bad neighborhood, use nofollow links.

The great thing about using nofollow is that it helps you stick to good networks and build more authenticity and authority legitimately. At the same time, it shows Google you respect its algorithm and that you are doing your best to build traffic ethically.