Digg v. Yahoo = Community v. Traffic

Slammed at, ahem, Yahoo today working on a few cool pieces I'll post here as soon as they're up. But I wanted to weigh in real quick on another Yahoo group who's working away: the would-be Digg killer "Buzz." Buzz clearly isn't innovative. Initial reviews were it was a badly done, purple version of Digg. New features launched today, and I'm curious if people think it's better.

Of course, features aside, Buzz will never have Silicon Valley/early adopter love. I'd go so far as to say it'll never even have fan boys. (Even Calacanis had fan boys!)

But none of these are the same thing as saying Buzz won't be successful. Think about all the technologies we use daily. Did Google invent search? Nope. Did Gmail invent Web based email? Nope. It just did both better. Same for Apple and the iPod. Ok, so has Yahoo really executed better? Not yet, say most people. But Yahoo does have something no one else does: An obscene torrent of traffic. And traffic is money on the Web.

Trust me on this one. I can not divulge Tech Ticker numbers, but they are shockingly large. I'd love to think it's Henry's boyish charms, the swear word that will occasionally fly out of my mouth unchecked, Andy Kessler's sheer grace on a Segway, or the frenemy drama just boiling under the surface between Aaron and me. But a big part is just how enormous Yahoo Finance is. In a world where traffic matters this much-- and can essentially route ad dollars around the Web-- being cool isn't the be-all, end-all.

That said, Digg has something Yahoo doesn't: Community. You could argue that makes its traffic more valuable in circles. Community is the single most important thing that has kept Digg ahead of so many competitors to date. When Netscape offered Diggers MONEY to do the exact same thing on AOL's clone, a good number refused because they were loyal to Digg, and the fan boy cult hero Kevin Rose. It's less tangible, but there's real hard-to-replicate, dollar value in that too.

How this battle plays out will teach us some important lessons about how to value companies in a Web 2.0 world. Which do you think counts for more?