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Matt Cutts: Let me start with your second point that only a small percentage of the links count; if you actually look at the volume of links on the web and then look at the percentage of links that have the no-follow attribute it turns out that is a very small percentage.

I know that the perception is that whenever you’re trying to get links they are all no-follow and you can’t get them so that makes a lot of people grumpy because they want to get as many links as they can and they want them to be follow links. The fact is if you look at the internet almost like a pie chart or bar chart the number of links that have the no-follow attribute is still very, very small compared to the entire pool of links on the web.

So, how can linking remain a larger part of search algorithm when the majority of internet users are unable to post a followed link? My answer to that is anyone can post a followed link if they make their own website. The trick is to make your own website and make it so compelling, so interesting that people want to link to your site.

And typically whenever people want to link to your site they will link with a link that is followed. For example all the people who blog about things, all the people who write about stuff online, a lot of those links actually in the content of blogs or new stories do flow PageRank. Those are editorial decisions made on the basis of merit. So if you make something that is really, really great you’ll find that it’s not that hard to get links that have the follow or do not have the no-follow attribute.

I know some of the common places a lot of people hang out might have no follow and that might feel a little discouraging but bear in mind that is only some of the web. It turns out there is a lot of the web that has the follow attribute or that does pass PageRank and you can definitely get links if you make something that a lot of people want to know about and a lot of people want to tell their friends about.