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Alexa rank is a global ranking system (and a subsidiary company of Amazon.com) that uses web traffic data to list the most popular websites. It's calculated by looking at the estimated average daily unique visitors and number of pageviews for a given the site over the past 3 months. It ranks literally millions of websites in order of popularity, with the lower your Alexa rank, the more popular your site is (according to Alexa at least). It also looks at how a website is doing relative to other sites, making it a useful benchmarking KPI or for competitive analysis.
Alexa ranking shows a number of metrics and these include Alexa traffic rank that reveals ranks in USA, and other locations, Sites Linking in, and, right on the alexa charts, you can see the various fields that you can graph out your website history and make evaluation. According to Alexa’s official website, the rank is calculated using a combination of estimated average daily unique visitors to the site and the estimated number of page views on the site over the past 3 months.
Data for their ranking system is based on traffic provided by their “global data panel”. This data is gathered from internet users who use one of the browser extensions available for Google Chrome, Firefox, Internet Explorer etc.