How Web Directories Work
A web directory is a directory on the World Wide Web that specializes in linking to other web sites and categorizing those links. Web directories often allow site owners to submit their site for inclusion. Human editors review submissions for fitness.
Human-edited directories are often targeted as part of a strategy for being indexed in the major search engines. The idea being that a new site needs to quickly build inbound links from reputable sources in order to have higher rankings within search engine results. (Source: Wikipedia)
Noted web directories include:
From the Yahoo! Directory listings page:
The Yahoo! Directory is organized by subject. Sites are placed in categories by the Yahoo! Directory team to ensure that the Directory is organized in the best possible way, making it easy to use, intuitive, and helpful to everyone.
LookSmart bills itself as vertical search; whereas once it was a general directory, LookSmart tends now to focus on commerical sites. It powers its own directory and the Wisenut search engine, and the volunteer-driven Zeal community of non-commercial websites. LookSmart's database powers a number of minor search engines, including Lycos, Snap, and Search.com. LookSmart currently offers paid listings, called LookListings, for commercial sites. Zeal links are free of charge, provided the site is non-commerical.
The Open Directory
Also known as dmoz.org, the Open Directory is a volunteer driven directory of websites parsed into specific categories. ODP powers directory data to a number of search engines, including Google. Submission to the Open Directory is free, though controveries have arisen with regards to the response time of submission to certain categories, which are known to have lapsed several months. The ODP also allows web users to volunteer as editors, provided they meet certain standards.