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!