Alexa, a subsidiary of Amazon.com is a tool for a ranking system. Alexa kind of audits and makes available the frequency of visits to various Web sites. Alexa’s ranking is based on the traffic recorded over a 3 month period from users that have the Alexa toolbar installed. The algorithm of Alexa for traffic ranking is based on factors like “reach” and “page views”. Reach refers to the number of Alexa users who visit a particular site in one day. Page view, as the name indicates, is the number of times a particular page (URL) is viewed by Alexa users. Alexa calculates the reach and number of page views for all the sites on the internet on a daily basis. This is averaged over a period of three months.

To get started with Alexa you have to download and install the Alexa toolbar. The toolbar displays the global rank of the site visited, and also the sites that have been visited by Web surfers that are linked in some way to the site being visited. The Alexa toolbar also sends data to the central server each time a web site is visited and if the browser has the Alexa toolbar installed. It sends information about your IP address and the page you are visiting. Such data is collected to arrive at a numerical ranking. The smaller the numerical ranking the better. A ranking of less than 100,000 is a possible sign that the site enjoys some decent traffic.

The benefits of Alexa

It can serve as a competitive intelligence tool.
It helps advertisers and sales oriented sites to get higher advertising revenue (based on ranking number) and realize the marketing potential of a site.
It can serve as a tool for SEO.

Limitations of Alexa

Without the toolbar installed it cannot be of any use and there are thousands of sites that do not have it installed. So the ranking can be misleading.
It is said that it can be inaccurate and that Alexa traffic can be greatly influenced by other factors.
Alexa does not have the potential to rank a sub domain separately. Traffic is calculated only on the top level domain.

Alexa can be useful for direct marketing and advertising. If your site is focused on these then it can be of some worth. As a website monetization strategy it is of some value. It is of use to sites that get high traffic and if you are looking at converting your site traffic traffic into sales.

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