Having too many outgoing links on your site can be a problem for a number of reasons. Firstly there’s less chance that the Search Engine Spiders will get caught & spider your whole site, therefore decreasing the number of pages you have listed in the index. Secondly, since the Bigdaddy update Google has placed more important on the type of sites you are linking to. If you own a site about pets & you have loads of outbound links in your footer that are linking to debt consolidation or mortgage sites then Google will assume that you’re either selling links or using these links for your own gain in order to achieve higher rankings for other sites. Appropiate use of the rel=nofollow tag will allow you to have links on your site & not get penalised for them. Obvisously if the links were on your site in the first place in order to help you get indexed then rel=nofollow is pointless, but it is useful to use it widely on your site in order to “direct” the spiders to the bits you want & don’t want indexed. If you have a blog or a site that has a large amount of affiliate links, using re=nofollow will top the spiders following these links therefore retaining your Page Rank & also keeping the spiders refreshing your content instead of someone elses. If you want to know how to set up rel=nofollow on links here’s an example:
[a xhref="http://www.adwordaffiliate.co.uk" mce_href="http://www.adwordaffiliate.co.uk" rel="nofollow"]Affiliate Marketing Software[/a]
This will create a link to this site here with an anchor text of Make Money Online, however the Search Engine Spiders will not follow the link because of the nofollow tag. Using these techniques you can help increase your page relevance to the spiders & also maintain the maximum page rank on your pages without filtering it off to other sites through links

wrote, on July 17th, 2006
Great tip. I have seen a lot of people who want to link to irrelevant sites just to get the PR. Finally, google will be checking that. The ‘nofollow’ tag is definately a great tool.
wrote, on September 30th, 2006
Is it the spider will not care of those hyperlinks and continue to scan the whole page?
is it if we do not put rel=nofollow, the google will stop there and crawl to those page? confusing.. tell me more about it..
wrote, on September 30th, 2006
According to Google’s Pagerank algorithm, Your pagerank will be shared among your outgoing links.
But if you place a nofollow tag, Google will ignore it.
wrote, on October 10th, 2006
Great point! It makes sense but I didn’t give much thought to the fact that spiders will likely leave your site the more there are outgoing links.
-k
wrote, on December 14th, 2007
Great tip! Thanks for the advice. Nice tip to help improve pagerank.
wrote, on February 12th, 2008
Great tips, I’m working on reducing my outgoing links and this is a good way to do it.
wrote, on March 10th, 2008
I am reducing my outgoing link also. If I do have out going links, Is it better to link to high page rank sites? My site has alot of electronics. Is it good to link out to Best buy or simular site like that?
wrote, on May 28th, 2008
This is quite useful information.
I am a graphic/web designer and currently working on SEO for a site. I would like to know whether internal linking will gain page rank or not?
Also, do i need to create robots.txt inside root directory?
Regards
prasad