Most web services closely track their site usage and site conversion. A "user" that "converts" equals $.

In e-commerce, you could describe it like this: get people into the box (drive usage) and do well for them when they're in the box (drive conversion).

I thought I'd take a moment to clarify a few of the key terms associated with usage metrics in e-commerce as there's often some confusion around how these metrics are defined. In a subsequent post I'll talk about some of the key conversion metrics.

Usage Metrics:

Registered User: a new user, or a user that came to the site for the first time in a given period and accepted terms of use and (generally) provided the site with their email address
Total Registered Users: sum of all new users
Unique Users or Unique Visitors: the number of individual people that came to the site in a given period (only count 1 visit per person)
Sessions: the number of total site visits during a given period (count all visits for all people)
User Activity: the % of total registered users that visited the site in a given time period

To keep it simple, when evaluating a web service's usage I really only want to know two things: 1.) how many total registered users do they have and 2.) what % of those users visit them each month?

Generally, I find that usage is pretty healthy if around 25% of registered users are coming back to the site each month, though this can vary widely depending on the vertical.