A link relationship value (rel="nofollow") used when the publisher prefers Google not associate their site with the destination.
Nofollow is a relationship value that can be attached to an HTML link. It tells Google that the publisher does not want the link treated as an ordinary unqualified association when more specific values do not fit. The link can still be visible and usable by a person; the attribute does not remove the destination from the page.
It is important to separate link qualification from page indexing controls. Adding nofollow to one link does not make the destination private or guarantee that a search engine will never discover it elsewhere. Likewise, it does not replace a noindex directive for a page you control. These mechanisms answer different questions.
Paid placements and user contributions have more specific relationship values, sponsored and ugc. Choosing a value should reflect the real relationship rather than a blanket assumption that every external source is dangerous. An ordinary useful editorial reference does not need to be treated as a commercial placement simply because it leaves your website.
Takeaway: Use nofollow deliberately for the relationship it describes. Do not rely on it to hide information, prevent all crawling or remove a destination from search.
Example
A business writes a warning about a dubious offer and includes a link so readers can identify what is being discussed. Its editor does not want the reference mistaken for an ordinary endorsement. The reader can still open the link, while the relationship is qualified in the markup.
What to check
Inspect the actual rendered link attribute when checking implementation. If the real need is to control access to sensitive information, use an appropriate access-control solution instead. If the link is an advertisement, review the sponsored relationship guidance rather than assuming nofollow is the only available option.
For more detail, see Google outbound link qualification.