A Lot of Search Engine Optimization and Search Engine Marketing Professionals are voicing their opinions and saying than directories are dead. But remember, these are the people that also say that Page Rank is dead, SEO is dead, and the latest this is dead theory. So is directory link building no longer worthy? well only the Search Engines can tell you for sure.
I believe the real issue with directory links is that only some of them are good and worthy, while some others are junk, being able to tell this difference is the key between loosing your time and having a fruitful link building campaign. How you can tell if a directory is good enough or that you should pass it. Here are the 3 main criteria of identifying a good directory from a bad one.
1) The director is listed in the Search Engines and most pages are being crawled.
You can find the directory in the most popular search engines, Google, Yahoo, MSN, and Ask. Also the category pages of the directory are cached on the search engines, if the directory offers detail pages, these should be indeed too.
Check the source code of the pages of the directory. Look to see if the links are plain a href's, without the rel="nofollow" attribute, and no sneaky redirects are present. By validating all these you guarantee that these links are seeing and counted by Search Engines.
3) Doesn't link to bad neighborhoods.
The directory doesn't link to questionable websites, specially topics like gambling, casino adult, and illegal content websites. Be very wary about directory that offers sitewide likes to these type of sites.
Hopefully these guidelines will help you do more quality link building campaigns getting links from quality web directories.