keeper - 9:23 am on Aug 31, 2004 (gmt 0)

Here are some initial benefits and risks that spring to mind:

Benefits:
1) Difficult to fake actual traffic. Even click bots would be difficult if search engine's source traffic directly from a toolbar with a private key or something similar (security ain't my area - sorry)
2) Data still available on a page by page basis.
3) I like your idea of growth rate too. Meaning that a site that gets press or other types of public exposure automatically gets a boost in relevance for its on page factors. Once the 'buzz' recedes, so does the boost.
4) Ability to treat this data as a seperate 'knob' or multiply with link pop to add sanity to the link pop score.

Risks:
1) Quality sites that do not get a lot of search traffic and/or do not advertise and/or do not have an existing large user base are inconvenienced to the factor that their "competition" are benefitted by their own traffic levels.
One could argue this may lead to the popular sites perpetually dominate SERPs.
2) Toolbar data may be argued to have a skew in its sample. Is the toolbar user a regular user? How will the use of this data effect the users who do not have toolbars installed? Are there any large differences in SERP expectation?
3) Leads onto the inherent Alexa type arguments, but in this case - the data is only one of 100 algo factors, so by and large should be beneficial to relevance.

I would bet the farm that Yahoo and Google are already trying out stuff like this.