Another set of questions dealt with by Matt Cutts of Google on February 26, 2009 dealt with the issue of nofollow links on web pages. The actual exchange is listed below.
Two questions about nofollow –

In the video, Matt discusses the basic dichotomy between the factions on each side of the nofollow tag debate. On the one hand are those who have highly-rated sites such as Wikipedia, which tend to come up near the top of the list on many search algorithms, and on the other are the sites that are externally linked via a nofollow tag that prevents their site from getting any page ranking credit even if they are clicked on by users of the original site.

Since search algorithms are mathematical creations, there are always operators looking to unnaturally bend such equations into their own favor. One of the ways in which this was done was through the use of links to highly rated sites such as Wikipedia, which would in turn leads to elevation of their own page ranking. Using the nofollow tag wipes out any chance that search engines will consider the link when it comes time to execute the underlying algorithms.

This need to exclude opportunistic free riders who really offer no added value via their links tends to work unfairly against sites that are genuinely valuable and at times the foundation of the information flow that led to the creation of the original site. By a blanket use of nofollow tags, therefore, sites such as Wikipedia are not allowing due credit in the form of higher page ranking to be given to the fount on which their article was based.