Building a web directory initially requires just the domain name, hosting, web directory script, and some knowledge in the language used by the script that you are going to use.
There are both free and paid scripts available for web directories, and they both differ in many features. But anyways if you want to have a start with minimal investment, there are many free directory scripts available for use.

Here are a few of them -
Php Link Directory v2 - One of the all time favorite scripts for web directory, this script has many features in both the free and paid versions. Mod Rewrite for SEO Friendly Pages, Integration of Paypal for Paid Submission, Admin Configuration settings, Many templates and mods are available for customization of the script and directory.
Download phpLd2

eSyndiCat - Includes both free and paid versions in which you can have search engine friendly URLs, thumbshots of submitted websites, alexa and page rank display, Multiple languages, Lot of admin panel options, creation of custom email templates and much more.
Download eSyndicat

Site-Sift Listings - This script has all features in free and paid versions, just the difference is the removal of footer link in paid version. Can have SEO friendly URLs by a single click, backup database anytime to save your data, currency can be changed, admin panel customization, Supports payment processors like Paypal and 2CheckOut. Meta Tags inclusions to link pages.
Download SiteSift

phpLynx - The lately popular script with symbolic categories, saving searches for later use, upto 7 type of listings with different packages, report, refer and rate links. Many other features like SEO friendly URLs etc. This is also available for both paid and free versions.
Download free version phplynx

There are few others like qlweb and freedirectoryscript.com which i would be reviewing later. These are the most known and preferred by web directory owners.


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