The problem is that times have changed; Google’s link algorithm has become much more advanced and is beginning to give much less weight to links that are easily built i.e. links that can be built by a webmaster with little or no work.
To better understand how the link algorithm works think of it like this:
When one website links to another website, it counts as a vote which is basically saying to Google ‘hey this website is really good’ – but when you have the ability to ‘vote’ for yourself it makes the whole process a shambles. If you were running for prime minister you wouldn’t be able to submit hundreds of votes for yourself now would you.
Keeping the above in mind, you should be able to understand why links from link directories are obviously not going to help your rankings much. However, link directories do serve their own purpose…
Believe it or not people do still use directories to find what they want, not the directories you can find online that are called something like ‘free-link-directory’ but the bigger ones like Yell, Thompson and Applegate, people do use these on a daily basis.
Links and listings on directories are also known as ‘citations’, a citation listing is basically a link or a reference to your business with you business address on the same page. These are important for good search rankings when trying to rank locally and for location based terms; for example:
A link on the Yell website, with your business address next to it is telling Google ‘This business is based at 15 Fairy Tale lane, Gold Town, Hampshire, GU12 4AP, UK’, the more websites that are telling Google this, the more Google thinks your well known in the area and that address is correct (you’d be surprised how many people use fake addresses to rank in local search).
So although building directory links may not help you rank for high profile terms like ‘car insurance’, they may just give you that little boost you need to show in the rankings for a term like ‘web design in Miami’; and lets not forget the extra traffic the larger directories can potentially bring. Because of this, I do believe building links via directories is not dead (yet anyway) – however, spammy directory links, the buy ‘5000 directory links’ packages can get you penalised; have some common sense and put yourself in Google’s shoes, if you can see it’s spammy – Google can too.