Directory Submission is one of the easiest way to create a permanent back-link to a website and everyone in the world of search engine optimization used to believe that the more back-links a website is linking to, the better. The main purpose of directory submission site is to list and categorize websites on the Internet for the benefit of Internet users and to increase the visibility of a website on the Internet and in search engines like Yahoo, Google and Bing. However, because of the unethical behavior of Blackhat SEO guys to increase their website's popularity, they conduct activities in directory submission sites that violate the rules and guidelines of search engines particularly Google. But search engine will not tolerate this approach and they will find a way to disregard the majority of links coming from directory submission sites, also known as "over optimization" Boost the Traffic: List of best Directory Submitting Sites
Also, directory submission sites perform approval period for each website URL submission to limit easy way of giving a back link. Most directory sites take a few months before they accept and include into their database a particular URL and it is not guaranteed that a website will be accepted. But not all directory submission sites practice approval period for a site to be included into their databases, and these directory sites have been abused by Blackhat SEO guys.DIRECTORIES & CURATED LISTS: Week 14 of the 26-Week Digital Marketing Plan
Due to the abusive approach of Blackhat SEO guys to directory submission sites, Google, a leading search engine on the Internet has started to ignore links coming from Directory websites and decrease the Pagerank of websites that have been exagerratedly linking to directory submission sites and worst, penalized a website from their database. Because of their guidelines, Google can penalize a website that they believe performing Blackhat SEO or unethical link building technique. Small Business Guides - Local Directory Submission
As a result of Google's action, SEO firms do not perform a website submission on directory sites for the websites that have been over optimized on directory submission sites. They also believe that linking into directory sites will not increase the performance of their websites and it may possibly harm their sites in the future.