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What is Alexa? According to alexa.com
Alexa is useful resource for people to discover information about websites. You can use Alexa to discover how popular a site is (based on its alexa rank), to find new sites, to learn who owns a site and a lot more. Whether you are a web professional trying to size up your online competition or you're just trying to find the best website to buy a new TV, Alexa is for you.

How does it work?
Alexa ranks sites based on tracking information of users of its Alexa Toolbar for Internet Explorer and from integrated sidebars in Mozilla and Netscape.

Is it accurate?
There is some controversy over how representative Alexa's user base is of typical Internet behavior. If Alexa's user base is a fair statistical sample of the Internet user population e.g., a random sample of sufficient size, Alexa's ranking should be quite accurate. In reality, not much is known about the sample and possible sampling biases. A known source of bias is the self-selecting, opt-in nature of Alexa traffic tracking software installation, but the significance of this bias on rankings is not known

Other issues:
* Alexa does not get you much direct traffic (unless you get into the top 100). It gets mostly Ego searches from webmasters looking at their own domain.
* With a small sample audience minor changes in site traffic can represent huge changes in Alexa rating
* In simplest terms, Alexa is truly biased toward a webmaster audience
* On April 16, 2008 many users reported dramatic shifts in their Alexa rankings. Alexa confirmed this later in the day with an announcement that they had released the new Alexa ranking system, claiming that they now take into account more data sources "beyond Alexa Toolbar users".

Also, The Alexa toolbar is regarded by many vendors, such as Symantec and McAfee, as spyware!

Why do you hear so much about Alexa and why is it being promoted so heavily by some e-marketer’s?

* Sometimes (not in call cases) webmasters, advertisers and ad networks use your blog’s Alexa rank as a gauge to determine the worth of a link on your website. If you depend on link or site selling as a form of monetization you’ll definitely want to increase your Alexa rank, because it’ll increase your bargaining power when it comes to ad pricing.
* Sorry to say, though, it’s mainly ignorance–most people don’t read the fine print about how the stats are being generated. The rankings aren’t worth much-except for ego.
* Most people see graphs and rankings and think automatically it’s legit. Numbers can’t lie can they? (Note sarcasm) We get that it’s hard to believe. I mean who wouldn’t be concerned when you go to Alexa.com and see certain sites, maybe competitors websites, higher than yours. You are competitive and want your to be higher. But really, who cares about rank, if you don’t actually get more business?
* Another trick is the quick con of shady e-marketers by getting website owners to install the toolbar to inflate the stats by having them visit their own site, and sell the results back to them as being some kind of expert. People love numbers and graphs. Few ask questions on how the info is determined.
* Think of this, if we were pushing you to install the Alexa Toolbar, and we know you are a regular reader of this blog, then my Alexa rating would also rise (along with your site). In short, a pyramid scheme of Alexa ranking.

So if you still think you want to increase your rank, read the rest!

1. Write content that is related to webmasters. This can fall in the category of domaining and SEO, two fields in which most webmasters will have the Alexa toolbar installed. Promote your content on social networking websites and webmaster forums.
2. Write or Blog about Alexa. Webmaster and bloggers love to hear about ways to increase their Alexa rank. They’ll link to you and send you targeted traffic (i.e. visitors with the toolbar already installed). This gradually has effects on your Alexa ranking.
3. Flaunt your URL in webmaster forums. Webmasters usually have the toolbar installed. You’ll get webmasters to visit your website and offer useful feedback. It’s also a good way to give back to the community if you have useful articles to share with others.
4. Install the Alexa toolbar or Firefox’s SearchStatus extension and set your blog as your homepage. This is the most basic step.
5. Encourage others to use the Alexa toolbar. This includes friends, fellow webmasters as well as site visitors/blog readers. Be sure to link to Alexa’s full explanation of their toolbar and tracking system so your readers know what installing the toolbar or extension entails.
6. Work in an Office or own a company? Get the Alexa toolbar or SS Firefox extension installed on all computers and set your website as the homepage for all browsers. Perhaps it will be useful to note that this may work only when dynamic or different IPs are used.
7. Get Dugg or Stumbled. This usually brings massive numbers of visitors to your website and the sheer amount will have a positive impact on your Alexa Rank. Naturally, you’ll need to develop link worthy material.
8. Pay Cybercafe owners to install the Alexa toolbar and set your website as the homepage for all their computers. This might be difficult to arrange and isn’t really a viable solution for most. I’m keeping this one in because some have suggested that it does work.