Alexa Ranking is a ranking system set by alexa.com(a subsidiary of amazon.com ) that basically audits and makes public the frequency of visits on various Web sites. The algorithm according to which Alexa traffic ranking is calculated, is simple. It is based on the amount of traffic recorded from users that have the Alexa toolbar installed over a period of three months.
This traffic is based on such parameters as reach and page views. The reach refers to the number of Alexa users who visit a particular site in one day. Page view, as its name shows, is the number of times a particular page (URL) is viewed by Alexa users. Alexa.com makes it clear though that, if a particular user visits the same URL multiple times on the same day, all those visits will be counted as one.
The first step of the ranking process is calculating the reach and number of page views for all the sites on the Web on a daily basis. The Alexa ranking is obtained by performing the geometric mean of reach and page views, averaged over a predefined period of time (three months).
How Alexa Ranking Works
It's quite easy to get started. All you have to do is visit the alexa.com site and download (and install) the Alexa toolbar . This toolbar offers a search function but it mainly displays the rank (at a global level) of the visited site, as well as the sites that have been visited by Web surfers that are linked in some way to the site being visited.
The Alexa toolbar not only displays information, but it also sends data to the central server. Thus, each time you visit a Web page via a Web browser (be it Internet Explorer or Firefox) that has the toolbar installed, information is sent to the server indicating your IP and the page you are visiting. Such data is gathered from all the Web users who have the Alexa toolbar.
With Alexa, the smaller the numerical ranking, the better. Most people say that if you manage to make it in the top 100,000, it is a sign that your site enjoys quite heavy traffic.