Blog Post

Alexa can be injurious to your wealth

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!

60 Responses to “Alexa can be injurious to your wealth”

  1. We recently launched a public and free version of Compete(dot)com to offer a more intelligent service to the market.

    I want to thank Fred for his earlier comments, but want to add that many of the top web operations in the market use Compete’s Intelligence services and consider Compete the gold standard. Within the U.S. Compete has the largest and most diverse panel and applies a rigorous normalization process to make the data representative of the U.S. internet population.

    As far as an API, it’s coming soon.

    Thanks, TJ

  2. om,

    i’ve written a number of posts on this

    alexa is unreliable, but i still like to look at their numbers

    for free data, compete, snapshot.compete.com, is the best

    and i think comscore is the gold standard and they are beginning to offer startups their dashboard service at very attractive prices.

    bottom line is i visit all three and rely on comscore when money is on the line.

  3. Oh I have seen the so called results of Alexa rankind first hand with my own blogs – and just as with technorati there is a MASSIVE fault towards non english blogs just to start something.

    My german blog has rougly 15-20 times the hits than my english one and still Alexa lists the english one as much more authorative.

    Just as with IE, the plugin has to be installed and to be working – something I doubt for firefox. Just because I do have a google search field in my Firefox does not mean it does provide the same user data to google than the optimized IE toolbar.

    I do not mind if somebody takes those numbers into account additional to other data- but not alone just based on that.

  4. Ig,

    Put the Quantcast measurement pixel on your site, and we’ll show you an accurate number for global and US users.

    Our panel estimate – for US alone – is 400,000 users per month (Alexa doesn’t even give you a unique user count, or the option to correct the numbers).

    Paul

  5. Chris, Quantcast looks interesting but I compared my site’s data on our internal logs and Google Analytics (which is almost 100% in sync) and Quantcast – and Quantcast is off by… 20 times!!!! :))) What are these guys smoking? :) Alexa is many times more reliable, sorry.

    Quantcast has some really cool stats some of which are wacky and some are… TRUE! how do they get it beats me…

    Anyway, a curious site, worthwhile looking at but they have long way to go to have any credibility compared to Alexa.

    Cheers
    ig

  6. Om, great points, indeed. I experienced that a lot: “wow, you’re so high on Alexa” or: “well, you don’t seem to be growing” (while we are growing). More importantly than IE/FF dilemma though:

    1. Alexa exists in ENGLISH and most people on the Internet no longer speak Englih or are native English speakers
    2. Alexa is very much scewed towards North American traffic (check the ranking of some huge Chinese megaportals on it)
    3. Alexa ranking depends on page views and many sites are built in such a way that not all page views are “created equal”
    4. Alexa measures the “Web 2.0” crowd VERY well, but not the general public

    Cheers
    ig.

  7. News Flash !!!

    An Alexa toolbar DOES work in Firefox.

    http://www.quirk.biz/searchstatus/

    I’m shocked people like Dvorak don’t know this, and people take his word for it eagerly.

    Granted, this new revelation doesn’t fix all the problems with Alexa. But advertisers have been using the Neilson ratings for decades, which are also fallable.

    The point is we need something to hang our hat on, and no rating system is perfect.

  8. In my opinion Quantcast is a lot better indicator than Alexa, and provides some interesting data. Nothing’s been done with Alexa for the last 3 years. It’s time to move on.

    Of course, quantcast is showing very low numbers for a lot of popular sites on Web 2.0. However this may be an indicator that we at the cutting edge of Web 2.0 may actually be a very small community indeed.

    -Chris

  9. Quite an indictment of a free and generally useful service. Seems ironic you would criticize anyone for providing unreliable information, being a provider of similarly unreliable information yourself:

    1) Alexa does work with Firefox. I’m using it right now via the search quick plugin.

    2) Who says Amazon operates Alexa’s website? Check the IP address and domain registration, if you know how, and you’ll see it’s hosted at UnitedLayer.

    3) Alexa has lengthy disclaimers describing how Alexa usage may differ from general Internet usage. Perhaps you could add a disclaimer to your blog indicating that your statements may differ significantly from the facts.

    Lastly, I see you use sitemeter to measure your own traffic. Why not publish your own numbers as a step toward the utopian world in which everyone gets to know everyone else’s site traffic?

    Denny

  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!.

  11. 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.

  12. 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

  13. 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.

  14. 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

  15. 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?

  16. 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.