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Benefits of inclusion in the Yahoo Directory depends on how you value a link.
Imo, the best links have solid backlinks themselves. I bumped into a formerly important company in the search space that is slumming selling links from it's PR 5 and 6 topical hub pages. It's backlinks are total crap, all of it, and I mean 100%, are nepotistic. No outside citations. Bad backlinks! No donut for you!
Yahoo Directory's backlinks are impeccable. They're natural and solid, backed up by age and authority. If the riff-raff stay out because they don't think the PR is worth it, and the editors weed out the remaining riff-raff, then that directory listing looks even better to me.
1) in your opinion, are paid directory submissions any different in Google's eyes than selling links?
2) if you had $1000 to spend on directory submission/review fees would you:
spend it on Yahoo + BOTW + 2 or 3 others to be on pages 6 or 7 levels deep with zero PR
spread it out across 20-25 less authoratative directories?
I'd argue that 20-30% of yahoo directory listings are banned in the own search engine. What kind of "trust" does yahoo have in its own diretory. Zero.
They ban their own paying customers that have been human reviewed for quality. Thats why the company is year by year clearly heading down the tubes.
Since yahoo directory generates no clicks either, you are better off paying 10 other quality/human reviewed directories like best of the web for listings then yahoo in my opinion.
I say unequivocally, that Y! is a good idea. It will give you a bump in authority if you otherwise don't have it and makes your positions much more defensible. I speak from personal experience with a whole bunch of sites in different niches.
As for Big G, they recommend it. Quoting from The Webmaster FAQ at [google.com...]
# Submit your site to relevant directories such as the Open Directory Project and Yahoo!, as well as to other industry-specific expert sites.