Web Directories are Finished!
Often Google and other search engines would rank these links and pass the pagerank through to your website, thus increasing your domain authority and ranking.
But Google has cracked down on sites offering Paid Links and this now includes Paid Web Directories.
There are in fact hundreds if not thousands of web directories out there that offer paid inclusion to get on their site.
Google has caught onto these very low quality sites and are basically discounting all these links.
Watch this recent Webmaster video from Google Search Chief , Matt Cutts.
If you get into high quality directories like Dmoz, Yahoo Directory, YellowPages or local Australian directories like TrueLocal etc then as these are moderated sites (ie spammers can’t flood them with links), Google will still validate these links and pass some pagerank.
Basically Web Directories should no longer be part of your SEO link building strategy.