A little bit of research and I came across a page on Jon Hughes' blog, "Notes from Phazm" that provides some evidence as to what is going on with the Alexa redirect function.

For those who haven't heard yet, the Alexa redirect now produces a 404 error.

For those who aren't familiar with this subject at all, allow me to explain. The Alexa redirect was a technique used by many to theoretically increase the Alexa rank of their sites. You would slap "http://redirect.alexa.com/redirect?" in front of any link to your site, and it was believed that would send all link clickers through Alexa to be counted before proceeding to your site. So basically, the redirect was a trick used to make up for visitors who don't have the Alexa toolbar installed.

However, it turns out Alexa never officially admitted the redirect would do any such thing. In fact, there was apparently no official notice along the lines of, "Now you can use our redirect function." But somehow the technique became a fairly well-known practice on the web. Some people are adamant that it served no purpose, while others claim to have noticed a definite benefit to their ranks from using it.

For whatever reason, Alexa has removed the redirect link functionality. Jon Hughes actually went to the trouble of asking them why, and this is the response he got:

"Dear Jon,
Thank you for your message.
We no longer provide support for the redirect function.

Best regards,
Alexa Internet Customer Service"

How fitting that Alexa sent out a legitimate "Dear Jon" letter to let all us bloggers know it's breaking up with us! (At least as far as the redirect is concerned.)

I've just noticed this today, and maybe it's only a short-term thing. Then again, maybe not.

Theory #1: Alexa for some reason is not performing redirects, but not to worry, as this soon shall pass.

Theory #2: Alexa will never again perform redirects, as it has decided they are a bad idea.

My money's on #1, but this just goes to show you that using an Alexa redirect is indeed risky. If you were to build a redirect into your blog's "Home" link, a user wanting to check out your front page would instead be shown this:

Previously, I've explained how downloading the Alexa toolbar will boost your Alexa rank. Now I'm going to delve into how the redirect works.

It's pretty simple. You basically send traffic through Alexa's site, to yours. That way, anybody who gets redirected counts as a visitor, even if they don't have the Alexa toolbar. Using the Alexa redirect is a great way to make Alexa aware of all the visitors you have that Alexa usually can't keep track of.

This is the code for the redirect:

http://redirect.alexa.com/redirect? + your chosen URL

So to redirect to misinterpreted.org, the link would be:

http://redirect.alexa.com/redirect?http://www.misinterpreted.org/

Great, so now that we have the code, how do we use it? There has been a lot of debate over whether it's a good thing to use it in links coming in from outside your site. Some people think the redirect will kill any transfer of PageRank, which would be bad. Others say that Alexa transfers PR no problem. But since the jury is still out, the risk is there. Another potential downside has to do with your ranking in the Search Engines. If you were to put a normal link somewhere out on the net, Google would eventually find it, and count it in your site's favor (usually). If you use the Alexa redirect, the theory (or fact?) is that Google wouldn't be able to see that link as being in your favor, and you'd lose out.

So, the Alexa redirect will boost your Alexa rank at the expense of PR and Search Engine placement.

But there are places you can use it where the negatives won't be a factor. Some bloggers change their in-site link to their home page, and use an Alexa redirect instead. There is some debate concerning whether the PR from all your pages can count toward your home page when you use a homepage Alexa redirect. My take is that there's probably not as big a risk concerning PR when using the redirect within your own site.

Another way you can use it is if you control a link that a lot of people use to get to your blog. If that link is very popular, you might try making it into an Alexa redirect. That way Alexa counts all the people who come through it, and you only have to change a single link.

If you decide to make use of this trick, keep in mind that every link you change will now rely on Alexa to work properly. So if Alexa goes down, the redirects won't work, and the links will be dead.

Update, 1-28-08: Looks like the Alexa redirect is gone for good.