I used to be heavily involved in directories and it was profitable at the time, not sure now as I no longer am involved with them. To start one, download a free directory script, get some hosting and promote it. Niche directories are much more likely to please Google etc than a general directory, so if you can target a niche you will probably be more successful. Its not easy to make money from them though, to make a good niche directory full of quality listings will take a lot of time and effort, I am talking several years of continued work to really get something successful and profitable. Good luck.
First,you need a good directory script. This biz is great coz it can easily earn you $50/day. But the down site is,there are many people that do not link back.
This area is over saturated now, if you are coming up with a specific Niche Web Directories, it may worth.