Is it still considered reciprocal linking if one of the links has a nofollow tag?

[AndrewHill]

I have a popular website in which I include nofollow links to many local businesses, like restaurants and retailers. Many of the businesses are local startups that are more focused on word of mouth and often have no idea what SEO is. Seeing as I am already mentioning them on my website and my readers are finding them via the links, I want to reach out to these businesses to see me if they might give me a link since I have been linking to them for years.

My question is: If these business owners decide to link to my wesbite and they give me a 'followed' link, will this look like reciprocal linking in the eyes of search engines? In other words, does the nofollow tag I put on my links to other businesses negate the reciprocal link penalty since both parties are not benefiting from a link juice exchange?

[GrowthHackingGooglesIndex]

Don't stress on this.

Say you write an article about a business/product or two.  One of them catches wind and references that article in an article or a news page.  Do you see a reason for penalization?

This kind of thing happens all the time and it is fine.  So unless you are trying to catch a case of Artificial Growth Syndrome by manipulating recips you've got nothing to worry about.

In your specific case, make sure you are not creating a significant percentage of your total incoming links in this manner since you are actively pursuing.  Maybe create a badge/seal of approval in this case.   As Seen on etc.  Then instead of emailing begging for a link you can email and let them know they have been reviewed and deemed worthy of your approval

[Modi]

I will say 'definitely yes'

Reciprocal links has been dead long way back - as been considered an artificial strategy to build the PR / Authority of site. Its been rather considered as spam and are flooded across net suggesting to go away from this strategy.

the best way if to link is to have nofollow attribute in your passing link. This will ensure that other site pass on authority to yours, without any paid or value consideration from your site.

[ClaireH-184886]

would it be a good idea to do a no follow link on the website as then this would be seen as not exchanging links

[Modi]

I can refer a quote - probably can be helpful to you

Q: People are all about links but then there's a concern about linking to bad neighborhoods. How do you identify bad neighborhoods? Should you nofollow them or stay away totally?

Matt Cutt Response: Use your gut. Trading links is natural and it's natural to have reciprocal links. At some level, natural reciprocal links happen, but if you do it way too often, it looks artificial. My advice is to go with your gut and if you're worried, you can use nofollow.

Source - http://www.seroundtable.com/archives/015764.html