Hi, I have been going through couple of threads which talks about too many links in a web site in the eye of SE is a link farm. I run a free directory web site, it has more than 500 links as of today. Will my website be penalized for having this many links? How do i sense that? Is there a way to prevent it? - Saran
Make sure that you approve quality sites only. Keep it small but quality. For instance, you my approve a link today and the content may change tomorrow or the site is going to die. make sure there are no dead links, no parked pages, no low quality spammy sites, etc. Don't go for quantity, go for quality.
You should have a team to check and verify websites in your directory. If you have more quality websites, more other websites will come to you.