Unlike highly automated search engines, directories are manually compiled taxonomies of websites. Directories are far more cost and time intensive to maintain due to their lack of scalability and the necessary human input to create each listing and periodically check the quality of the listed websites.
General directories are largely giving way to expert vertical directories, temporal news sites (like blogs), and social bookmarking sites (like del.ici.ous). In addition, each of those three publishing formats I just mentioned also aid in improving the relevancy of major search engines, which further cuts at the need for (and profitability of) general directories.
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