[Halfdeck]

Excellent resource there Halfdeck. I think I read somewhere that Google is using actual human beings to catch websites that try to manipulate SERP's in any blatant form

Thanks. Yeah, the latest Toolbar PageRank (TBPR) update involved Googlers manually penalizing link sellers' TBPR.

what would be the point in having web directories

The value of directories are quickly dwindling. Many of them were "fixed" this year by Google (some no longer rank for their site name) especially those who blatantly sold PageRank to submitters.

For example, Aviva Directory does not rank anywhere on the front page right now for "aviva directory" (they used to be #1).

URLTrends shows you they went from TBPR 6 to TBPR 4 in the last update:

http://www.urltrends.com/viewtrend.p...adirectory.com

how would anyone get any kind of ranking if they didn't link exchange?

Link exchange isn't bad, if done in moderation. Google will penalize you if you link exchange excessively, as the owner of Skyfacet.com found out:

http://www.seroundtable.com/archives/013340.html

Matt Cutts:

Reciprocal links by themselves aren't automatically bad, but we've communicated before that there is such a thing as excessive reciprocal linking.

What exactly is excessive? If you have enough of them to make a bot think your backlinks aren't votes, but instead are part of an artificial link pop inflation scheme, I'd say that's excessive.

SEOs moved away from reciprocal link exchanges years ago. Today, SEOs hunt one-way links, and operate under the radar to try to make their artificial links appear natural.