Links are conversations between websites. When you add a link of a website or a webpage, Google bot crawl these links also. There is something called page rank which is rank of a website in the Google search results. It starts from 1 up to 10. The crawled links are one the main factor of page rank. The higher you have back links, the higher your page rank increase.
Adding no follow links
If you share this post to social networks such as Facebook, Twitter and Google plus, because you enjoyed this post, will give slight boost to this post. But if somebody from Facebook company shared this in to the individual website, then that will be give higher boost. When bloggers realized this, there was a trend to buy links from other websites and this became spamming. Google banned so many websites due to spamming and unusual link building.
The back link flow must be natural and organic. So Google introduced no follow links. This means that if one add rel=”nofollow” tag in a link, the search engine bots will not crawl that link. This means the conversation is broken.
When should one add no follow links?
Well that is up to blogger. One should add no follow link when you are writing a sponsored review about a brand. Google does not allow bloggers or ad sense publishers to write sponsored reviews. If you like a brand, you can write a post about that. However adding a follow link may lead to banning.
Publisher should be giving a no follow link for a sponsored link.
Blogger should add no follow link to bad sites, which are having Google policy violations. If the links from these sites are linked to your site, then the website may be banned from Google due to bad neighborhood.