The boundary between subject directories and search engines is blurring, as more and more search engines include limited subject directories.  Yahoo, for example, was one of the original subject directories on the Web, but it has developed into a major search engine as well (hence its dual listing on Internet Search).

A subject directory comprises links organized into subject categories by human beings. Because of the human involvement the database is rather smaller than the typical search engine database, and it is more focused. Subject directories are intended primarily for browsing; that is, the searcher may peruse a subject hierarchy in search of information. Many also feature a search program, but it is the directory's subject categories that are searched, not a much larger, uncategorized database as is the case with search engines.

A search engine has one or more programs (sometimes called a "spider") that searches the web for Web pages and creates a vast database of pages (not just links) largely unscrutinized by humans, and not grouped by subject. When a search is submitted to a search engine, another program involving algorithms (that count how often the words you entered occur, where they occur, etc.) searches the database and posts the results in a ranked order. Algorithms and search protocols vary from search engine to search engine, and so results vary also. Also, since words are often used figuratively, their literal meanings in a document are not an infallible indicator of content. Consequently, some search results can be skewed and unrelated to the search terms input to the search engine.

For more information comparing search engines, subject directories, and the "Invisible Web," see Types of Search Tools from UC Berkeley.