You might often hear the terms "web directory" and "search engine" used interchangeably, but there is a difference. Yahoo! Kids is an example of a web directory: all of the sites in it are evaluated and categorized by actual people, which means that we can make categories that you—the user—can browse through. Thus, you can look for information on Yahoo! Kids either browsing the categories, or searching with a keyword.
A search engine uses a computer program called a robot (or just "bot") to look for any or all of the words you type into the search box. The answers aren't organized by category, and you sometimes have to look through a bunch of them to find what you're looking for.