Somehow, I hadn’t thought of this: in comments on Rogers Cadenhead’s post (which I’m currently unable to get to for one reason or another), someone that I think was Jeremy Bowers brings up an interesting point. I’ve been assuming that nofollowing a link is the equivalent of not having it there: if you have three real links, and one nofollow link, then each of the three real links gets a third of the PageRank that the page has to pass on. Jeremy suggests that instead, it may be that each of the three remaining links gets a quarter of the PageRank.
A quick review of basic PR: give every page that you know about PR 1. Then, start at a page, count up all the links, and divide that page’s PR (still 1, for now) by the number of links. That’s how much it can give to each: a page with four links can give .25 to each. To keep things honest and working, apply a damping factor to all the links, higher for external than internal links: let the external links give .21, and the internal links only .18. Then all you have to do is iterate around through the whole intarweb, at times looping back around to your start page and refiguring what it gives based on more incoming links for it, until everything stabilizes. So, the basics to remember are that the more links you have, the less you give to each one, and links to other sites leak PageRank: you can’t give quite as much to yourself as you can to others, but especially if they don’t link back to you, an external link sends it to someone else, an internal link keeps it for you.
So, what’s the difference? Well, if as I assumed a nofollowed link just doesn’t exist, then by nofollowing all of the external links on a site, it’s possible to conserve all that PageRank for yourself. This isn’t something that most people will do: it’s mean, and cruel, and clearly breaks the web. However, the people with spammy sites that don’t actually include any content at all, only crap that’s designed to suck in search engine users and either show them ads or get an affiliate payment when they click out, don’t care. If they can keep every bit of their PR, they will, and thus they will rise in the rankings relative to sites that actually have external links.
On the other hand, if nofollowed links count against link numbers, but then drop their allocated PageRank on the floor, then Google and friends have handed weblogs a pretty poison pill. If your entry has three internal navigation links, a link in the body of the post, and twenty comments amounting to thirty nofollowed links between links in the comments and commenter URLs, then rather than split that page’s PR in four pieces, Google will split it 34 pieces, three for you, one for the site you linked to, and 30 that it essentially keeps for itself.
If the first case is true, then PageRank really must be dead, and Jeremy Zawodny just declared its death a little too soon. I doubt that’s the case, since I still see expermental evidence that PageRank matters, though it’s hard to tell exactly how much it matters. But in a situation where you can subtly avoid giving any PageRank to others, without having to be obvious about not linking (and after all, how many people realize that in terms of search engine awareness, Wikipedia no longer links to anyone but themselves?), PageRank is dead.
If it’s the second case, well, expect to see not only your commenter’s weblogs, but also the sites you link to, sink in the rankings, because then nofollow is just a way to persuade weblogs to pour out all their PageRank on the floor.