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Source: Wordpress SEO: Advanced Nofollow

Wordpress is already well optimized when it comes to SEO (that’s Search Engine Optimization). There are some basic changes that are usually performed like changing the link structure to include the title of the articles or displaying the title of the article in the web browser’s title. Most users stop here, some go ahead and install SEO plugins which do some magic in the background.
Advanced tips are not that easy to come by and most websites running a Wordpress blog do not have them implemented. This article will list some options that center around the nofollow tag. Nofollow basically tells search engines like Google to not count the link vote that is usually being passed when linking on the Internet. Why is that beneficial? A website has a certain linking power. Each link that is pointing to internal and external resources gets a piece of that linking power. Not all pages should be treated equally however which is what this article is about. It makes for example no sense to pass linking power to internal pages that you do not want to link for, think of privacy policies, contact pages, login, log off or social bookmarking links.
Wordpress themes come with a surprising amount of links, the majority of which is not set to nofollow. Here are a few areas where you should consider placing the nofollow link tag in a Wordpress blog: