I know you love to tell everyone to dyor so I'll share some. A basic Google search of "how does Alexa work?" Gives this result:
"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."