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Isn't it time we asked, what will happen to directories tomorrow? (I am not talking about niche directories since they will always have a role to play irrespective of their prospect with Google, if run properly.) Directory as a concept of listing websites in categories sustainable in the long run? If no (which I am almost certain of), then what should they do to be sustainable over the long run?, say over the next - 1 year, 2 years, 5 years.
My forecast (with my past experience and instinct as inputs) says that, Search engines will introduce into their algorithm that distingishes few trusted directories such as ODP and Yahoo, and devalue all other directory listings. If itsn't happening today, will happen tomorrow. The word will spread, webmasters will spend less time on directories, directory as a component in the link popularity mix will gradually lose out, to a point where FFA, Guestbooks are at now. Majority of today's directories will shut shops.
Need of the hour is to change. This is the time to change if one is serious about running a directory for a long time. And change to a point where the directory is no more a "directory" as we know today, but something more.
It can transform as a portal that gets a lot of traffic and doesn't have its fortunes tied to Google or Search Engines.
It can transform to be a collection of knowledge, a la wikipedia, and provide contextual benefit to webmasters seeking link popularity.
Avenues can be many and the limit is as much as one's imagination and creativity goes. Any one who feels for directories, I hope, would want to add to this thread.