When you’re looking for the right directory to list in or to use for research, it can be a nightmare. Everyone thinks of Yahoo!, of course, but there are quite literally thousands of other directories out there, many specialized, others not. How can you tell the difference?

By being educated on what you’re looking for. When you’re looking for the right directories to list in, use the following guidelines.

1. Everyone lists in free directories. Why not? You can list in as many as you want, and you’re not losing anything by doing so. Free directories include Yahoo! and Dmoz, as well as hundreds of others who either use their own listings or license listings from Yahoo! and Dmoz. You shouldn’t stop here, though, especially if you’re running a commercial website.

2. The more directories you’re listed in, the more inbound links to your website you’ve got. And the more inbound links your website has, the higher the search engines will rank your page. Make sure when you create your directory listing to use your keywords in the text; in some search engines, this will help your ranking as well.

3. Some of the free directories are not being listed well by Google and other standard search engines. This is not because of some nefarious competitive advantage, but because the free directories often look like search engine spam or because they don’t optimize their sites well. The paid directories are careful to watch for this; after all, the more hits they get, the more they can charge for their services.

4. After listing in all the free directories – which you should, as it costs you nothing but a little time – you should start listing in the better paid directories. Even though you have to pay to get in them, they give you an edge that the free ones don’t. For one thing, they’re more exclusive, and customers won’t be looking at your competitors as much. For another, as noted above, the directory will probably place higher in a search engine. And they tend to be specialized. If you sell medical equipment, listing in a medical equipment directory will almost certainly be a worthwhile investment.

5. If you list in really good and specific directories with proven traffic from customers you want to draw, you’re investing your money in the right place. A few good quality links will draw the perfect customers for your business. Finding the right directory is hard, but search for directories that specialize in your industry and in industries that cross into yours; for instance, if you provide medical equipment, don’t overlook listings for scientific and laboratory equipment.

6. The next generation of directories is here now. With sites like MSN’s Small Business Directory, targeted searching for exactly what you want is easier than ever before. In addition, many of the newer directories offer you additional small business tools, more information, specialized content for your industry, and many other services. You’ll only find these with paid directories.