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Summary:

Every so often you meet entrepreneurs and venture capital investors who talk about Alexa ranking of a web-based service, using it as some sort of a yardstick for growth and reach. It is as good general, non-specific indicator, say if the traffic is going up or […]

Every so often you meet entrepreneurs and venture capital investors who talk about Alexa ranking of a web-based service, using it as some sort of a yardstick for growth and reach. It is as good general, non-specific indicator, say if the traffic is going up or down, but to make money-decisions based on Alexa rankings is, well living dangerously.

A few weeks ago while taping an episode of Cranky Geeks, John Dvorak pointed out that Alexa toolbar, which is used to calculate Alexa rankings, works only on Internet Explorer 6.0 (or higher) on Windows. Given the proliferation of Firefox and Macs, it would be hard to assume Alexa’s accuracy, since the Alexa toolbar doesn’t really work on those two platforms.

Not that this is exactly news, but I still am amazed is the number of people who use Alexa as a fiscal crutch. What really is more worrisome is the increasing number of outages Alexa is experiencing. This past weekend, when most of us were reading the peanut butter memo, Alexa was experiencing some serious outages – for substantial period of time.

Data collected by Pingdom Gigrib shows that Alexa was down for about 14 hours and 8 minutes in November 2006 (so far), up from three hours and 20 minutes in October and about 80 minutes in September 2006. I wonder how Alexaholic was impacted by these outages?

In comparison, some of the better-known Internet brands had a little or no downtime – MSN was down for just over two hours, You Tube was around 65 minutes, while Google, Amazon, Yahoo and eBay were up a 100% of the time. Since Pingdom’s Gigrib software runs only on Windows platform, one cannot really assume completeness of its data. However, other sources that are also reporting on Alexa outages, so it is safe to say the downtimes were fairly substantial.

Downtime shows that Alexa is not reliable even as a general barometer of a website’s shifting fortunes. Furthermore, it is a sad reflection on Amazon’s web services business that includes S3 and EC2 efforts. (S3 has had issues in recent times as well.) If Amazon can’t keep the Alexa up and running, how seriously can you take their backend?

The point is not to pick on Alexa, but to bring into focus the biggest shortcoming in the post 1990s-web: lack of a good dependable yardstick for ranking websites and web services. As more and more web properties come into existence, it is time for the industry to develop a more dependable, and open source tool to track general traffic trends, and web site rankings.

Last week, Google, Microsoft and Yahoo came together on a standard for crawling websites. Why can’t these three companies and others who offer toolbars include tracking technology in their toolbars and hence offer a fair representation of the web traffic trends.

A non-partisan group could collect the data; much in the way open source projects keeps track of their code. There will be privacy and other related issues, but then these companies are chockfull of smart guys with all the answers.

In closing, if you are a startup that brings up your Alexa ranking in a meeting with us and tout that as your shining achievement, it would be time for my smoke break!

  1. Interesting article Om.

    Even I have found difficulty in accessing alexa site, not once, but many times.

    I hope even the VC’s doesn’t just look at the alexa stats alone, in judging the startup.

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  2. Alexa is also prone to manipulation. It’s stunning to think that someone would actually use it to value a web property. I can’t understand why anyone would use it as more than the most general gauge of traffic trends.

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  3. Nice writeup Om – I tell ya – I can probably count over 100 proposals that came to me for some network or ad that someone wanted to run when I ran the Internet Marketing Dept at a Fortune 100 – just amazing how many talked up their Alexa ranking.

    I never trusted Alexa for anything, and still don’t. I know of sites that have 100x my traffic, yet my Alexa is better. Just makes no sense.

    To the uninformed, it looks like a great tool because it is backed by Amazon. Who wouldn’t believe Amazon?

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  4. Nice article. I have also noticed that Alexa has too much downtime. off late, it’s getting worse.

    Anyways, I have found Google Analytics extremely useful in analyzing website traffic and making improvements to the website. It’s also free.

    thanks,
    Manish Lachwani

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  5. Panel based approaches not only suffer from inherent biases and large margins of error, they fail to utilize the key advantage the Internet has over traditional media – direct measurement of media consumption and audiences.

    Quantcast is an alternative to Alexa’s toolbar-based audience measurement. We offer a free Internet ratings service with rankings for over 20M sites and demographic audience ratings for over 1M.

    We quickly realized that the panel based approach in isolation was limited and developed a complementary approach that we call the Quantified Publisher program. Through this free service we directly measure a site’s audience using a measurement pixel. This lets publishers respond to inaccurate published ratings with an accurate third party measurement, and gives them control over how the information is presented.

    Example of Quantified Publishers include The Nation (quantcast.com/thenation.com), TechDirt, (quantcast.com/techdirt.com), Download Squad (quantcast.com/downloadsquad.com) and hundreds more.

    We’re still in beta, but believe we are making great strides towards demystifying the measurement of audiences and creating a resource of open, transparent data that will benefit publishers and advertisers alike. As each new site registers, our model for all sites becomes more accurate.

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  6. Hey Om,

    I definitely agree with your view on the inaccuracy of the Alexa ranking system. One thing to point out, however, is that as the ranks increase, they inherently become more and more accurate.

    Just something to note…

    Cheers,
    Aidan

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  7. Om,

    I have seen you at times pull data from comScore. So how does it compare with Alexa ? I had asked if comScore had an API but they said they won’t let cannibalization of their data.

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  8. Hey, no so fast! we have to leave something for Web3.0…

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  9. Alexa works with Firefox. There is a popular Firefox extension called “Search Status”. If you install that, your surf will become part of the Alexa sampling.

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  10. Most VC’s, big media buyers have hitwise subscription (30k+ per yr) which is much more accurate and i am sure they also look at the actual logs before commiting anything.

    IMHO, bloggers are those that quote alexa the most!.

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