I was talking to JenSense about DaniWeb's link directory at Search Engine Strategies NYC the other day, and she said that Matt Cutts wrote an entry on his blog not too long ago about Google's stance on directories and nofollowing them. Did a search and can't seem to find it. Can anyone help me out?

Mattcutt does not want directories to sell links , whatever directories caught selling links has been penalized in google SE, Mattcutt wants to monopolize selling link business via adword. Officially he tells that directory should use rel="nofollow" for putting advertisement link, but even then directories are getting penalized.

Right, that's Google's stance on paid links. But I'm not talking about buying/selling links - I'm talking about free directories like DMOZ.

Sorry to change the topic but if that is all true, why does Google recommend paying to be in Yahoo Directory?

Where do they say that? Better yet, WHY would they say that? Google and Yahoo! are competitors, more so if the Microsoft deal goes through.

Here is one thing to look at-not 100% on point but close. Let me know your thoughts and I will look for other references. This came from the Google Webmaster Central Blog

2-3 people have asked about directories. I've talked about this before, so I'm going to include the answer that I gave at http://www.mattcutts.com/blog/how-to-report-paid-links/ a few months ago:

"Q: Hey, as long as we’re talking about directories, can you talk about the role of directories, some of whom charge for a reviewer to evaluate them?
A: I’ll try to give a few rules of thumb to think about when looking at a directory. 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 or site."

I hope that helps answer the question of how (say) the Yahoo directory is different from the examples I showed in my post at http://www.mattcutts.com/blog/sellin...pass-pagerank/ . I hope it also answers the question of why a "bidding directory" that just gives the top slot to the highest-money bid might not be as trusted by Google.

At one time, it was posted on the Google website that it recommended being in both the DMOZ and Yahoo directories because they are both old, trusted authority sites, which Google places a high value upon. The Google Directory still uses DMOZ for its results, though I would gather few people use this anymore.

Your point is well taken and it seems as though getting listed in DMOZ these days is like buying a lottery ticket.

Buying a lottery ticket is a good analogy. I also like to think of DMOZ as a long-term stock investment. You won’t know for a year or two whether or not your stock pays off. If it does, then great. If not, then buy another stock (resubmit).

What do you think of Yahoo Directory?