I am working with a business that has three urls and instead of having unique content on each they have the same site on all three. I know having duplicate content is bad so I am recommend that they stop this. They would like to keep the urls because the urls are similar and a lot of people use all three b/c there URL can be confused easily. I was thinking about making two of them redirect to the one main one. But I have heard that redirects are also bad. So I am also thinking about turning one into a link directory for the industry with lots of banner ads to the main site. This link directory would have relevant quality links that visitors will find useful. What do you think?
I don't think there's anything wrong with redirecting. Many people book similar sounding domains and divert it to their main site. And that shouldn't be a problem because all the domains are of the same company. Yes you can convert one of them into a link directory, but everything depends upon how the company has promoted their URLs. Such decisions are all yours and no external person can give any suggestion in this regard.
301 redirect is the most efficient and Search Engine Friendly method for webpage redirection. It's not that hard to implement and it should preserve your search engine rankings for that particular page. If you have to change file names or move pages around, it's the safest option. The code "301" is interpreted as "moved permanently". Regards