Does Google penalize sites that have backlinks from paid directories? Does it matter if they are strictly paid directories or a combination of paid, free & link exchange directory?
no. google like one way links. i heard that google now don't like link exchange. also they are checking social site from which sites people are book marking. its good idea to submit site in directories.
After posting this thread I realized it is not under the correct category, so I moved to http://forums.digitalpoint.com/showthread.php?t=233569