It's certainly not a standalone tactic but submitting to a few highly relevant directories is a good call, especially if it's a new site/business as they are quick to turn around and help establish a footprint.
If you have a budget for it trade association directory links are a good kick-start.
I'd say directories are a bit more valuable if you're targeting localised keywords (NAP)
Unique Websites: IMO, the days of paying for directory input are long gone. As said above, I would only use niche and local directories, possibly 1 or 2 respected others such as dmoz or aboutus.
I read an article recently by someone who's helping a company hit by unnatural links, and that suggested that Google is comparing your links profile with the link profiles of your competitors. If you have - for example - ;50 links from ;directories (even good solid high page ranking directories) and your competitors don't, this could be a red flag for unnatural links.
When considering submitting to a directory, I’d ask questions like: - Does the directory reject urls? If every url passes a review, the directory gets closer to just a list of links or a free-for-all link site.
- What is the quality of urls in the directory? Suppose a site rejects 25% of submissions, but the urls that are accepted/listed are still quite low-quality or spammy. That doesn’t speak well to the quality of the directory.
- If there is a fee, what’s the purpose of the fee? For a high-quality directory, the fee is primarily for the time/effort for someone to do a genuine evaluation of a url.
Matt Cutts, Google
Janna Maica Feliciano: Aside from the niche & locality of the directories, you should also check if it is well-maintained (e.g. Not spammed, new websites added to list regularly, and other factors you consider as "quality")
William Gomes: Personally, no. Come on, when was the last time you used a directory to find a site?
If your answer is yes you did then yes submit to that one ;)
Mark Preston: Got to agree with Janna, I stay away from anything that is not strongly related to my niche or a local directory. However some of the larger sites are still going all out for any old directory sites as ; mentioned in the post by +Kirk Fletcher below
Unique Websites: On the subject of directories, would you say that (which charges a hefty fee and gives dofollow links, sometimes lots of them) could trigger a penalty?
SEO and Social Media for Attorneys: I am still confused about how Google determines which directories are good and which ones are bad. The directory you mention seems to meet some of the criteria of a good one. It would matter where the dofollow links come from. ;
Tino Triste: + it's simple... If you feel that you might get referral traffic from a directory you should submit, otherwise don't bother.
W.E. Jonk: From the expert panel in this weeks SEO Questions hangout on air on 00:28:55 into the YouTube video: