A lot of people who are teaching SEO and on-site optimization teach that you should not link to other websites from you own sites, because it passes PR and link juice to these sites, and you don’t want to do that. And they also tell you that this will hurt your rankings. Thus they encourage people to add a nofollow tag to all their outbound links, or to simply not link to other websites, included trusted sources. And people end up building a site without linking to any authority sites in their niche.
I am going to show you that you should actually link to trusted sites in your niche, with dofollow tags, and I’ll explain how doing this can boost the authority of your own site.
When you visit a site as a normal person (not as an internet marketer), you are looking for some kind of credibility.
If you are looking for some health related information, you’ll want to see if the site you visit refers to medical sources, to medical experts on the topic, or to official sources and organisms on a given topic. If you are looking for ways to improve your credit score, you want to check that the advice given on a site is compliant with existing regulations, so you’ll look for a link or a mention of a trusted legal source.
If you are asking yourself if outbound links can hurt your SEO, and you land on this page 
, you may want to see a link to a respected source on SEO topics, like for example, this page. Note that I didn’t link to it with my anchor text (hint, hint).
So, linking to trusted sources will give you some credibility with your audience, which is something really important.
Then, linking to authority websites on the topic will show Google that you are part of the community, that you are referencing other sources, and that you are not a mere internet marketer who is after a few bucks. And this will give YOUR site authority.
To give you an example, I recently launched a website in a competitive health sub-niche, in which all the sites that rank well are definitely not internet marketers’ sites but rather webmd.com and these types of high authority sites. So, I decided to carefully list all my references for each article I put on the site (I had my writer use this research and put the references for each article).
And I linked to highly trusted sites, about 1 or 2 dofollow outbound links per article, all to PR4+ pages. And guess what? After just 4 weeks of getting the site indexed, it had a PR2 already, without any effort of building links on high PR pages (I actually had 0 links on pages with PR). So, this PR2 was here just because Google saw I was linking to relevant authority sites in the niche and decided that my site was “trustable” as well.
Now, does this mean you should have outbound links to your competitors’ pages?
No. You need to link to authority sites that you are not competing with. When I link to Webmd, I don’t consider them to be my competitor, even if they outrank me for some keywords, because they have a generalist health site and I have a very specific site around one specific health topic. I don’t link to them with anchor text, and I don’t put a suspicious nofollow tag.
Will I link to this related internet marketer’s site which has a PR5? No. This is an internet marketer’s site, hence my competitor for real, and his PR5 does not mean he has any authority, it just means he has PR. Whereas Webmd has authority and then it happens that it also has PR. Pagerank and authority are different, but this is for another day…
And does this mean outbound links will help your rankings?
No. This is not what all this is about. Too many people are confused about that: a site with authority does not necessarily rank high. Sites that rank high may have authority, but of course, not always. Linking to trusted sources will give your post authority, but it will not help (nor will it penalize) your rankings significantly by itself.
It might help a bit combined with proper SEO link building campaigns, though. Back to my example: my new site went from just indexed to PR2 in 4 weeks but this didn’t push the site up in the rankings at all. You still need to do your SEO and build backlinks.
As a conclusion, I would say that linking to authority sources (dofollow outbound links) will build trust and credibility with your audience, and with Google, and it will boost the authority of your site. Such outbound links will not really help your rankings but it will not penalize them either, provided you don’t shoot yourself in the foot by linking to your own competitors or linking with the anchor text you are targeting.
