Alexa traffic rank is based on three months of collected historical traffic data from millions users of Alexa Toolbar and is generally established as a good quality traffic barometer.

It is an incorporated measure of page views and users (reach). The three-month change is determined by comparing the site’s present rank with its rank from three months ago.

Find out how your web site traffic stacks up against all your competitors! Alexa Rank Checker is one of the most accurate and freely available tools to find out how well your site ranks up against millions of other sites on the Web.

The Alexa Traffic History Graph allows you to generate a traffic history graph for any site. Alexa computes traffic rankings by analyzing the Web usage of millions of Alexa Toolbar users.

This is a ranking method set by alexa.com that mainly audits and makes open the frequency of visits on Websites. The algorithm of Alexa traffic ranking is easy.

The traffic rank is based on three months of aggregated historical traffic data from millions of Alexa Toolbar users and is a combined measure of page views and users (reach). As a first step, Alexa computes the reach and number of page views for all sites on the Web on a daily basis. The main Alexa traffic rank is based on the geometric mean of these two quantities averaged over time (so that the rank of a site reflects both the number of users who visit that site as well as the number of pages on the site viewed by those users). The three-month change is determined by comparing the site’s current rank with its rank from three months ago. For example, on July 1, the three-month change would show the difference between the rank based on traffic during the first quarter of the year and the rank based on traffic during the second quarter.

Alexa ranking system is based on the level of traffic each web site get from the people who visit a web site with Alexa toolbar installed.

This traffic is based many parameters. Number of Alexa users who visit a special website in one day. Page view is the number of times a single page (URL) is viewed by Alexa users. If a user visits the same URL many times on the day, all those visits will be counted as one.

The Alexa ranking is got by performing the geometric mean of reach and webpage views, averaged over three months.
How Alexa Ranking Works

You have to visit alexa.com site and download (install) Alexa toolbar. This toolbar mainly displays the rank of the visited web site.

It also sends data to the main server. Thus, every time you visit a Webpage, information is sent to the server representing your IP and the webpage you are visiting. The smaller the numerical ranking, the better. If you manage to make it in the top 100,000, it is a sign that your website gets quite serious traffic.
Troubles with the Alexa Rank

Alexa ranking is deeply tilted towards web sites which have many webmaster viewers. This is because web masters are much more likely to have Alexa toolbar installed. Alexa is a simple way to calculate web traffic. What’s mainly important is that the Alexa Rank has become an essential factor in site monetization strategy.
Some Ways to Improve your Alexa Ranking

Install Alexa toolbar.
Place an Alexa rank widget on your web site.
Value content attracts large audience and maintains their revisits.
Encourage people to use the Alexa toolbar.
Take part in many web master forums which let you place your website in your signature. Webmasters usually have the toolbar installed.
Write content that is associated to webmasters.
Use Alexa redirects on your web site URL. Try this: redirect.alexa.com/redirect?www.girilaya.com
Build a webmaster tools section on your website.
Make an Alexa category on your blog and use it to include news and articles about Alexa.

Alexa Ranking Tool displays a graph from Alexa comparing up to 5 sites

Sumber : http://girilaya.com/index.php/girilaya/more-about-alexa-com

A lot of website owners are concerned... even worried... about their "Alexa rank."

Well, you shouldn't be, just as I'm not. The Alexa rank is really a meaningless number and here's why:

Alexa has an index which ranks websites on a list with the most viewed website as #1 and going down from there. Google has always been ranked #1.

And so, I have to ask this question: do you care how your website compares to Google or to YouTube or to Facebook? I don't care, and I don't think that our clients with websites care.

What most website owners care about is not how they compare to Google or Yahoo, but how many visitors come to their website.

Tell me how many people visit my website-- that's what I care about. And Alexa does not tell me that. Quantcast.com estimates that number of visitors, and so do some other web traffic monitoring companies, but Alexa doesn't.

In fact, when I want the best measure of my website traffic I simply look at my own website server reports, because that tells me exactly how many people come to my site and click on my pages and how long they are on each page.

Actually, my own server stats might under-estimate how many actual views I'm getting because in some cases my website pages are viewed through proxy servers that Internet Service Providers set up -- but that's another issue.

Google Analytics which is free to use also provides this information.

There is another problem with Alexa that everyone should know about: If you are not among the top 100,000 websites that Alexa tracks, Alexa says your web ranking can be inaccurate, and it can be way off. Really way off. For example, in the last month, our Alexa rank has had a wild swing from about 350,000 to more than 1.5-million while at the same time our web traffic has grown dramatically along with page views. But we were never in the top-100,000 so these swings are not considered to be "significant" by Alexa.

For months I've been asking why Alexa continues to "rank" websites that are not in the top 100,000 because Alexa cannot say those rankings are accurate and Alexa has not answered the question.

Alexa has a purpose if you want to know which of the "big websites" are winning the race for web traffic. And that's about it.

It doesn't tell you how many views, what pages, how effective a website is for advertising or marketing, if people like a site or don't like it, if it is credible, if it has good information, or anything else.

More importantly, if you are selling advertising on your site, or if you are trying to raise the value of your site because you intend to sell it, the "rank" means little. What counts is the number of visitors and the number of page views and the time spent on your site. It doesn't matter to an advertiser or to a website buyer if your one thousand visitors gives you a rank of 1-million. What matters is that you have one thousand visitors-- period. No one buys "rank" except someone who doesn't know better. Because in the world of advertising, you buy according to the "cost per thousand" not according to the "rank" of a website.

By the way, Alexa.com used to have an open forum where users could post questions and discuss problems. There were so many complaints about the Alexa system that Alexa removed its forum.

There is another 'problem" that I asked Alexa about that they would not answer: Alexa's ranking system is based on users who have the "Alexa Toolbar" and use it. Alexa will not reveal how many toolbar users it has. It is possible to use the Alexa toolbar on one browser of your computer for looking at your own website, while using another browser for looking at other websites, and you can conceivably influence the Alexa results.

And if you happen to look at the top searches on Alexa you will find that many of the searches would be those that website owners and operators would make. For Example, right now as I write this, one of the top searches is "Adwords" which I am sure refers to Google Adwords and that is not something that the general public is likely to search for on the web. So if Alexa's ranks are based on its toolbar users, it just might be giving too much influence to website owners.

You could in fact give your own site a boost by installing the Alexa toolbar on your office and home computers and instructing your staff and asking your friends and relatives to click on your site often using only the Alexa toolbar -- and look at other sites with another browser that does not have the Alexa toolbar installed.

I heard of a web cafe owner who installed the Alexa toolbar on a dozen or so computers with the home page of a particular website set to always display on those computers. Which website is displayed? Well, it's the website that pays him to have it displayed.