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As for me,DMOZ listing is very benefiacial than yahoo directory.Beside, it is free also.
As I know,there are mainly two types of backlink. * DoFollow * NoFollow DoFollow backlink are best in SEO because it increase your site page rank,SERP and traffic.
Re: Need of SEO
In simple words, SEO is one part of SEM and SEM is one part of internet marketing.SMO is one effective technique to increase website traffic as well as business.
The End.