A website which gathers and categorizes links to websites. Two of the oldest directories are the Yahoo! directory and DMOZ (also known as the Open Directory Project). At one time Google recommended acquiring links in those directories but ended the practice in late 2008.
Directories are distinct from websites (although they may include search functionality). Higher quality directories are generally human edited and categorize sites based upon all their content – not on a page-by-page basis.
An outdated – and potentially harmful – SEO strategy is to automatically submit sites to hundreds of low-quality directories in order to build a large link profile. It is generally believed that low quality directories have little impact on search rankings and a link profile consisting of many low-quality directory links my harm a site’s ranking.
Not all directory links are ineffective. Inclusion in high-quality directories that are relevant to your site such as local Chamber of Commerce directories and the directories of well-respected industry organizations can still be effective tools in an SEO strategy.