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As the name of this link implies, "Nofollow" endows webmasters to direct search engines a "Don't follow links on this page" or "Don't follow this specific link" instruction.  These links are usually tagged with the “rel” attribute along with the value of “nofollow.”  It was originally formed to clock search engines from following links in blog comments because of the high volume of blog comment spamming.  

“Nofollow” links can increase blog rankings by decreasing unnecessary page rank flow.  A “nofollow” link may look like this:

<a href="">Joomla Experts</a>

And when submitted, it will look like this:
Joomla Experts

To add nofollow link, this should appear:

<a href="" rel="nofollow">Joomla Experts</a>

It is very appealing that in Google Information for Webmasters, the “nofollow” attribute is a way to prevent Google from crawling a particular link.  It also implies that rel=nofollow in Google does discontinue passing PageRank to the target link and does not prevent the link from being confirmed as a backlink.

There are three cases listed in Google’s policies of nofollow practice:

1.    Untrusted Content.  This can deter spammers from unswervingly going tp your site.  It will help maintain your site from involuntarily passing PageRank to spammers on the web.

2.    Paid Links. 
Google advise webmasters and publishers to use nofollow on such links. Search engine guidelines oblige machine-readable disclosure of paid links in the same way that consumers online and offline appreciate disclosure of paid relationships.

3.    Crawl Prioritization.  Search engine robots are not able to sign in or register as a member in any forums, so there's no reason to invite Googlebot to follow "register here" or "sign in" links.  Using nofollow on these links permits Googlebot to crawl other pages you'd prefer to see in Google's index.

Google does not remove PageRank or anchor text across these links. The direct pages may still appear in Google’s index if other sites link to them without using nofollow, or if the URLs are tendered to Google in a Sitemap. It is vital to note that other search engines may deal with nofollow in dissimilar ways.
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