• Business Week, Wednesday, March 19, 2008 11 AM

In only three weeks, Yahoo's new Digg competitor, Buzz, is catching up to its rival in terms of the amount of traffic it drives to other sites. According to fresh data from Hitwise, Buzz drove just 10 percent less traffic to publishers' sites than Digg on March 17. Salon.com, for example, received more than 1 million visitors from Buzz in one day, while political blog The Huffington Post received 800,000 unique visitors. The stunning results prompted TechCrunch's Michael Arrington to say, "It's clear that a link from Yahoo.com blows away anything Digg or any other competitor can offer."

This is certainly good news for publishers, but is it also good for Yahoo? Where's the business model? Tapan Bhat, Yahoo's vice-president for Front Doors, says the company is preparing a new advertising package as well as promotional offerings for Yahoo partner publishers like the Associated Press. Yahoo Buzz users are actually more apt to visit the sources of articles than Digg users, which is bad for ad revenue.

Digg, meanwhile, still has a larger audience than Buzz, it's just that the Yahoo tool diverts more traffic back to publisher sites. "Despite being a much larger site, Digg sends only slightly more traffic to news and media Web sites," said Hitwise analyst Heather Hopkins. She added that Digg.com received a 75% larger share of U.S. Internet visits than Yahoo Buzz in the second week of March.

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