Hi Jeffrey,
We own and operate TrafficEstimate.com and can provide a little more insight into how it works.
We built an algorithm that attempts to estimate traffic based on various criteria. We calibrate the algorithm based on traffic from real websites, many of which we own and operate, and some that are owned by people that we are friendly with. It's hard to get the algorithm to match the exact traffic number for each of these sites, but we do get it close (often within 10% to 20%).
Like any estimating tool, TrafficEstimate.com tends to work best for larger sites. That's not to say you need millions of visitors, but for sites that have less than 20,000 visitors per month, it's really hard to be accurate, for any estimating tool.
In checking our own sites, it does appear to be running on the low side, so I'll have our team update it to get it to be more accurate, at least for our own sites. Hopefully that will translate into better results for you too.
If you (or anyone else) would like to share specific website/traffic data with me to help us calibrate it, feel free to reach out to me via private message (click on my profile). I promise that I'll keep all information confidential.
One final note about the sites we cover, we do track historical traffic (to provide year-over-year trending) for a large number of sites, but we don't cover all sites. We will work on adding the ability to get the current traffic estimate for any site, even if we don't cover it on an ongoing basis.
-Doug
