martinibuster - 1:21 pm on Jul 11, 2012 (gmt 0)

what if the big signal Google is looking for is that I've developed other traffic sources, that I've got people talking

Now we're getting somewhere. That's a good point, although I wouldn't label it as "the big signal." What you are referencing are citations. Anytime someone references (talks about) your site, that's a citation.

I wouldn't regard that as a silver bullet (or a replacement for links) for improving your rankings. But if you're amassing ranking signals, it's not a bad thing to have as many kinds of signals on your side as you can.

I think smaller sites can compete. Perhaps not always for the number one spot, but in my experience the number two and three spots can be negotiable.