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A web directory in it's simplest form can be thought of as a human indexed search engine.
Web site owners can visit a directory web site and make resource suggestions (submission) through an online form. A human editor will review the suggestion and add it to the directory provided it meets the submission guidelines for the directory. Because directories are considered one of the most important strategies of search marketing, they are # 2 among marketeers with a 61.7% preference .
Directories are human powered hierarchical structures of links to web sites: web directories are usually sites dedicated to links; they offer paid-for-inclusion (PFI) programs for commercial and e-commerce sites that when are accepted and indexed they enjoy better positioning. All e-commerce sites submissions in search engines like Altavista and directories like Yahoo must be done by paying a yearly "business express reviews" submission fee (pay-for-inclusion (PFI) programs) in order to be indexed (as long as they comply with directory rules and criteria. In general directories are more oriented to commercial and e-commerce sites and place a lot of weight on relevant content. Yahoo takes a more practical approach to technology, first identifying what people want and then building or buying a product designed to give visitors one less reason to leave its Web site. Yahoo! seems to be more about text matching when compared to Google, which seems to be more about concept matching.

Depending what directory you use, the criteria may differ based on the fact that the designed algorithms looks to bring results that respond to a variety of information that is inclusive within the directory portal; for instance if a product or service is being searched in a directory, the results may include many web sites that have a lot of internal content with a high relevancy to the search, suggesting results bias to information and commercial sites within the portal; this sites may enjoy better ranking on the long term. Nevertheless, because of the editing human factor, directories are a proven source of quality links and some have a powerful effect on Search Engine Ranking.

There are two major types of web directories on the internet, general and niche. A general web directory will have it's resources sorted into a large number of categories covering a wide range of topics. Niche web directories tend to focus on one subject with resources sorted into a smaller number of highly related categories.

The major purpose of a web directory is to provide directory users with a categorized list of high quality web sites from a chosen field or industry. With the advent of search engines as the preferred method for finding internet resources the importance of directories as information providers has diminished. But, as search engine technology and the field of search engine optimization SEO have evolved, a new use for web directories has materialized.

Current search engine ranking algorithms place a huge importance on back links to a web site as an indicator of it's importance on the internet (known as link popularity). Search engine's value links to web sites from web directories because these directories have human editors. Having your web site listed in a respected web directory is an indicator to the search engines that your web site has met a certain standard for quality and is a site worth linking to. Search engines also tend to serve up category pages from trusted web directories near the top of their search results so having your web site listed in as many high quality web directories as you can should be part of any web site marketing plan, especially when your web site is new. This is why submitting your site to a web directory can help you when you are optimizing your web site in order to gain more viable traffic for your site.

Please note, it is worth taking the time to carefully study and review directory relevancy to your market prior to making a submission. Some niche directories are specialized in specific subjects (manufactures, plumbing, countries, trade, regional, food, cosmetics, fashion, etc.) and niche businesses use them frequently.

Before submiting to any directory, it is a good idea to make sure that your site is complete and has a professional look. Not all directories are search engine friendly or provide traffic to their listings so it is up to the submitter to gather as much information about the web directory submission guidelines, linking structure and reputation prior to submitting a resource for inclusion. Following these steps, and submitting to a web directory is one way of making sure your site is a web success.

F.A.Q about Why Directories are important?

• Why Directories Are Becoming So Important?
Directories Are More Efficient at Getting the Desired Results than Search Engines.
Measured by how many clicks it took searchers to find what they were looking for, yellow pages were more efficient. On average, consumers used 4.6 clicks to find local results. With search engines, users took 7.6 clicks on average.

• Search Engines have Preference for Directories in Organic Listings
Many search engines are giving higher placements in their search engine ranking or organic listings to quality directories that fit many of the more popular key phrases that people use to search for resources. This has been especially apparent in certain markets for plural key phrases. So search engines are now driving a volume of search engine traffic to directories that fit a market niche and match popular key phrases in almost every industry.

As a result, more targeted directories are starting to be created to take advantage of this opportunity. Now there are opportunities for directories for local communities, market segments, vertical industries, associations, and special interest groups. They also create more opportunities for web sites listed in these directories to get increased traffic, exposure, and ultimately sales.

• Traditional Web site Listings vs. Online Yellow Page Listings
Traditionally a directory must choose between a traditional listing format or a yellow page format. A traditional listing format must have a web site address associated with the listing. Since it is estimated that still only 50% of businesses have a web site, this format limits your directory listing to only web site listings.

A Yellow Page format listing does not require a web site address. It is more focused on contact information but does not require a web site in order to be listed. Search engines have normally listed the traditional directory listing format in their organic search results. Because of the convergence of the search engine and online yellow page markets, both listing formats are starting to be offered by search engines and directories. However these separate listing formats are located either on separate sections of the listing page or separate pages.