There are some well known directories SERPs dropped so there is concern that Google is penalizing DIRECTORY. I don't think so. Why? try to search any directory related keywords, you can still see many quality directories there. STPT, BOTW, abilogic, romow, etc Here is the Q&A from Matt Cutts. From what I understand, quality directory still plays a positive role. http://www.mattcutts.com/blog/how-to-report-paid-links/ Q: Hey, as long as we’re talking about directories, can you talk about the role of directories, some of whom charge for a reviewer to evaluate them? A: I’ll try to give a few rules of thumb to think about when looking at a directory. When considering submitting to a directory, I’d ask questions like: - Does the directory reject urls? If every url passes a review, the directory gets closer to just a list of links or a free-for-all link site. - What is the quality of urls in the directory? Suppose a site rejects 25% of submissions, but the urls that are accepted/listed are still quite low-quality or spammy. That doesn’t speak well to the quality of the directory. - If there is a fee, what’s the purpose of the fee? For a high-quality directory, the fee is primarily for the time/effort for someone to do a genuine evaluation of a url or site. Those are a few factors I’d consider. If you put on your user hat and ask “Does this seem like a high-quality directory to me?†you can usually get a pretty good sense as well, or ask a few friends for their take on a particular directory. Q: Google’s quality guidelines say “Make sites for users, not search engines.†Put that in context for me; how does that interact with buying links? A: If someone is buying text links to try to rank higher on search engines, they’re already doing something intended more for search engines than for users. If you finish that guideline, you’ll see that it’s talking about doing radically different things for engines versus users (for example, cloaking or creating doorway pages). It would be a misinterpretation of that guideline to think “Okay, I can only do things for users, I can never do things for search engines. Therefore I can buy text links, but not in a way that doesn’t affect search engines.†That same philosophy would mean that you wouldn’t create a robots.txt file (users don’t check those), never make any meta tags (users don’t see meta tags), never create an XML sitemap file (users wouldn’t know about them), and wouldn’t create web pages that validate (users wouldn’t notice). Yet these are all great practices to do. So if you want to buy links, I’d buy them for users/traffic, not for PageRank/search engines.