I was thinking about this lately - my idea was it would have a portalization effect. It could strengthen the index or whatever page with the content feed, making it a favourite starting point for people interested in the overall topic. But it also could hinder users further exploring the site.
The contribution of the external content in building repeat visitors depends a) on how it matches with the rest of the content of the site, and b) on how integrated the external content is. think "leverage"...
If well done, the benefits far outweight the loss of visitors clicking on the link to the source site.
In fact I think it has to be extremely poorly done to make the net effect negative. I´ve seen people offering just the titles of (external) articles requiring registration to read the full text. Then it is much faster to copy the title to the google searchbox and get the source...
From my own experience external content don't really help in the long run - the first few times they might comeback & once they are familiar with the source they'll go there themselves bypassing us.I feel original content really helps -especially those that are interesting on a particular topic that you serve.
I used to use external content quite a bit, but found all it was doing was driving traffic elsewhere. Now i try and use my own content as much as possible for the somple reason of increasing page views.
I think it all depends on two things:
1) YOUR TOPIC. Do your readers care about news? Mine don't. (I have a travel-planning site, and my readers are looking for information like "how to find a hotel in Venice" or "where to find walking tours in Paris." Even travel-related news doesn't seem to interest them.)
2) YOUR TRAFFIC PATTERNS. Are users coming in via the home page, or are they arriving on internal pages via a Google or MSN search? If they're arriving via search, newsfeeds are likely to be a distraction.(They may be interested in *links* to external content, however, if that content is directly related to the topic they came looking for.)
There are some great responses here.. got me thinking. We provide both feeds for other sites that link the items back to our own content with RSS, js, and includes. We also use other feeds on our own.
Agree that just one feed by itself, really just publiscises the other site. However agree with many others that if you can come up with an original structure of content including highly targeted mix of external feeds, people may come back more to your page rather than the others! The key is making your page more compelling than the feeds that link out <b>as a whole</b>
News is a case in point. If you are providing all the news about your industry or area in one place, that is probably more efficient for people rather than jumping down a bookmark list to see if any new good stuff has been updated. How much easier to just go to one page, especially if that page is tailored exactly to get the news you want. Then you only need go to the other sites if they have new news you want.
I think there is a benefit to external conten but it can hurt a bit as well. For example, whenever I would reinstall windows (I've done it many times), I would change to homepage from msn to yahoo or google. Recently, msn started to change the type of external content they put on their site. The teaser links got alot more interesting, and I found myself actually clicking on many of those.
Not to say that the article wasn't always what I thought it was, but I did find a few interesting reads from it. So now my home page is MSN. But that's only because I might see an interesting article when I open up IE. When I have to search for something I go to yahoo or google! in fact about 95% of the time that I open up IE, I type in the URL to another site right away. I just find it funny ...