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I saw a technique used where there was a block with three parts:
1. Image (wrapped in an anchor tag)
2. Heading (anchor tag with heading text)
3. Paragraph (regular p tag with synopsis content)

e.g.

<li class="block">
<a rel="nofollow" class="thumb" href="#"><img src="images/placeholder_service_thumbnail.jpg" alt="" /></a>
<a class="h3" href="#">Good SEO Heading</a>
<p>Pellentesque habitant morbi tristique senectus et netus et malesuada fames ac turpis egestas. Vestibulum tortor quam, feugiat vitae, ultricies eget, tempor sit amet, ante. Donec eu...</p>
</li>

With the image tag there was a rel="nofollow" on the wrapped anchor tag. So the idea is that the users still has the ability to click the image and go to the details page, but the image link does not rank. When users click on the heading text, that is only what ranks for that specific page.

Q: Is this the correct approach? Does this even do anything? What is the best practice?

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I think the intent is to not dilute the link juice flowing away from the current page by funnelling it through too many links. Not sure how this works when those multiple links would be going to the same destination. –  Steve Dec 11 '12 at 2:59
    
@Steve that definitely makes sense, I just want to make if I apply this to the directory I am building that it is as optimized as possible right off the bat. –  Torez Dec 11 '12 at 3:26
    
@Steve I think you're talking about PageRank sculpting, which no longer works. –  GDav Dec 11 '12 at 8:39
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2 Answers

up vote 4 down vote accepted

Matt Cutts suggested letting link juice flow and to not try and sculpt your PageRank

http://www.mattcutts.com/blog/pagerank-sculpting/

It's pointless to set nofollow on an internal link going to an image with a relative path. Googl's smart guys, they spend millions on their algorithm so do you think that is fooling anyone or helping that site?

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The idea of a nofollow is to prevent Google from passing value across a link. Currently, it's commonly applied to links entered in unmoderated user-generated content, to avoid unintentionally having your site linked to anything risky.

Controlling anchor text

I think the intent in your example is to control the anchor text which is attributed to the linked page. In short, the words used in a link (i.e., the "anchor text") are part of the search optimisation of the page linked to. However, according to SEOMoz experiments, Google only uses the anchor text for the first instance of a link on any one page. So in your case, the developer is probably trying to ensure that the <h1> text, and not the image alt, is used.

PageRank sculpting

It used to be used (as Anagio notes) for a technique called "PageRank sculpting", whereby webmasters attempted to "hoard" their sites value by preventing PageRank from flowing to competitors or low-importance pages on their own site. That no longer works.

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