I love the tag cloud widget that comes with WordPress. There’s just one thing that bugs me: it floods every post or page with lots of internal links that a search engine crawler will follow. The SEO community says that this could be seen as some sort of artificial link generation by a search engine and eventually lead to a disadvantage in a site’s SERP ranking. Having fewer internal links on a post should also pass a higher page rank to linked posts as well. See this post from Matt Cutts detailing how it makes sense to nofollow non-essential internal links:
There’s no stigma to using nofollow, even on your own internal links; for Google, nofollow’ed links are dropped out of our link graph; we don’t even use such links for discovery. By the way, the nofollow meta tag does that same thing, but at a page level.
Unfortunately, it’s not possible to instruct the built-in WordPress tag cloud sidebar widget to use nofollow tags for the generated links. Read more »