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The Alexa Internet rankings: How objective?

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The Alexa Internet ranking system is widely used as a technical gauge for reviewing performance of specific websites. While similar in concept to the Nielsen ratings for television viewership, Alexa data is drawn from a deeper pool of resources but some say from a narrower demographic.

Alexa rankings are gained by data submitted through users of the Alexa toolbar. With over 10 million of those toolbars currently downloaded, one could accept the suggestion that the Alexa user base represents a fair statistical sample. Alexa was founded in April 1996 and was acquired by Amazon.com, Inc. (NASDAQ: AMZN) in 1999 for approximately $250 million in Amazon stock.

The question being addressed is, "Just how objective are the Alexa findings?" The simplest answer is that Alexa data is not objective at all. In the purest sense Alexa data has no basis in research and therefore its findings which are based on the direct submission of actual data makes those findings purely subjective. From my point of view though, this is a completely acceptable and highly accurate method of Internet traffic examination when given the fact that to skew the numbers in favor of one outcome or another would be very difficult, extremely time intensive and highly traceable.

I bring up the Alexa ratings because I have taken some heat in regard to my reference to it in exposing eBay's current declining site performance. In the Alexa ratings, eBay Inc. (NASDAQ: EBAY) is facing the big Internet "smack down."

Approximately one year ago eBay ranked between 5th and 8th on the Alexa scale for daily traffic ranking. Currently in the midst of a continuing downward slide, eBay ranks 16th among Internet sites visited. Yes, that's still a pretty high ranking among all the sites one could visit within the Internet but it gives one pause to wonder how eBay leadership might go about justifying the decline.

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Last updated: July 10, 2009: 04:21 PM

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