Many people are paying a lot of money to submit their websites to web directories mainly because of 3 reasons:

a) To get permanent 1 way link.

b) To get a good Google PR page linking to your site.

c) To get traffic / leads from directories.

Coincidently, the first 2 factors are part of the mathematics that determine how well your site will rank in Google Search Engine. Because of that, the "Web Directory Industry" exploded and you see tonnes of new web directories appearing eveyday. Even Yahoo and Microsoft have their own web directories.

The Problem

When everyone starts doing that, the World Wide Web becomes a place full of directories and links with no real content. So Google decided started treating directory websites as "Link Farms" and banned them. If you come across any old directory websites with PR of 0, you know that these websites are the victims of Google slaughter. The implication is that your one way link in their website will not help your Google ranking at all.

Are Web Directories Dead ?

Many people do not think so. I do think that Google will eventually make Web Directories useless in providing one way links and PR unless these directories can show that they are different. Google has already changed their ranking algorithm such that PR becomes devalued. One way links have to pass through strict filter to really make any impact. So, to rely on factor a) and b) to boost Google ranking is no longer valid (See top). If you want to rely on directories to get hits would be even harder. Statistics show that directories do not provide leads. Unless you are doing some sort of advertisements in the directory site, it is unlikely that anyone will notice your url especially when you are with hundreds of urls.

MSN and Yahoo Search Engines

Unlike Google, most of the traditional SEO linking and directory submission tactics still works for MSN and Yahoo search engines (You will notice that your msn ranking will climb up much faster than your google ranking). However I believe that in the near future, MSN and Yahoo will try achieve Google-like ranking algorithm. It is possible that they might choose not to follow google.

Invest in Web Directories or Not?

Submitting urls to good web directories is a quick way to get strong 1 way links and can help your site be spidered quickly. Dmoz especially, can make significant impact to your google ranking. I am not really concern about other directories but to be included in famous directory like business.com or botw.org gives my site recognition and prestige. In short, I would not want to spend too much time and money in submitting to web directories.

What Directories To Submit

1) If you decide to submit to directories, you will definitely want to start with dmoz.org. I would recommend you to just go for a deep category with very few sites but with an editor available. You do not need to worry about the page rank of the category because the chances of you getting into a high Page Rank category is slim and not worth waiting. Just submit and heck care. Personally, I do not believe that DMOZ will survive for long because it is maintained by volunteers and that the data could be subjected to manipulation. To me, the main reason why it is still surviving is because Google is using their data.

2) The next directory to submit is MSN small business directory. If you want value for money, this is the one. Though the categories are cluttered, you can get your urls into a few categories. They also give you a personal page where you can promote your company.

3) The next one you want to try is http://www.miscdirectory.com . The submission fee is just $3 per site & it has just 5 links in one page. Google has stated that one page cannot have more than 50 links per page. So the links you get from MiscDirectory are well indexed & help your website in both PR & ranking. Many directories with high PR might have their PR dropped to 0 overnight and you would be heart broken if you submitted your site to their directories.

4) You may submit to other web directories if you want but generally, I would not recommend spending more that $200 for web directory submissions. If you think you are rich, pay $300 and go for Yahoo Directory.

Conclusion

There will still be future for web directories but directories that do not provide extra services other than just listing URLs will die off slowly. Web directory submission is not the best way to get your ranking up in Google and will not provide you with impressive leads. However, submitting your site to a few famous directories will build up your reputation and web presence.