Recently google on its webmaster blog issued a warning for not using dofollow links in widget which are widely distributed across the web. Google consider such links in widget as against its webmaster guidelines.
Although Google already consider links in widget as part to link scheme but this is a specific warning.
Keyword-rich, hidden or low-quality links embedded in widgets that are distributed across various sites, for example: Visitors to this page: 1,472 car insurance
Google understand that widgets can help website owners enrich the experience of their site and engage users but there are certain widgets which place links as when they want with anchor text of there own choice and are not in control of webmaster placing on its website, which are considered as violation of Google webmaster guidelines.
Google also warned the site owner who add such widgets on their site to either make the link rel=nofollow or remove the widgets otherwise they can be subject to manual penalty.
For the widget owners Google advised to use the rel=nofollow for placing the links in widgets to avoid passing of pagerank and avoid making such links as unnatural. Google also advised that if you have received a manual penalty of unnatural links in your widget, just remove the links or make it nofollow and file a reconsideration request.
It is advised both for widget owner and website owners who put such widget on there website to make all such links rel=nofollow. Google earlier also issued warning to blogger to nofollow links.
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