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We can't know for sure that the freesite links were the "crap".
I still think a dupe content filter is just as likely (more likely, IMO) as a bad neighborhood filter.
I don't think we have a good model yet of why some of the medium-to-small linklists have lost their positions.
But I'd agree with Halfdeck, it's not at all likely that a lot of nofollows would lead google to drop the pages any further in positions.
If you nofollow, say, the freesite listings, sponsor links, and the trades, you create a kind of list that a lot of people would stop subbing to and trading with- but it would have been an interesting experiment, to see how google reacted to it.
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