Update:

The original post was written in 2009. In the meantime, Google is everywhere, and chances are likely that you are even logged in to Google one way or another while you are reading this. At this moment, the explanation below is no longer correct. Google normally doesn’t count your own site-visits, IF you are logged in to Google in the browser you’re using at that moment. Logged in to Google can mean logged in to google.com, but also logged in to Gmail, Google +, Youtube,…

The original post:

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Yes, it does, so indeed, it means that if you are working on your website, or set it as your homepage or something like that, it will count your visit everytime, and might potentially skew up your statistics. How bad your statistics are skewed is relative to the number of real visitors you have. If your website gets 100.000 visitors a day, then 1 more or less is only a very small percentage. However, if your website only gets 3 visitors a day…

Analytics does allow you to filter out certain IP addresses, but since your IP address is most probably dynamic, and shared with other users from the same provider, this may potentially also skew up your data.

Another way to prevent Google Analytics to count your visits is to add a simple line to your Windows Host file:

# [Google Inc]
127.0.0.1 www.google-analytics.com

This will redirect all calls to www.google-analytics.com (where the little piece of Analytics JavaScript is trying to go to) to 127.0.0.1, which is your own computer, and thus leave it not counting you.

The Windows host file can be found here:

Windows 95/98/Me c:windowshosts
Windows NT/2000/XP Pro c:winntsystem32driversetchosts
Windows XP Home c:windowssystem32driversetchosts

A last trick is to disable JavaScript, since analytics gathers its data through a JavaScript script. However, this and the previous method, will also stop other sites from counting your visits, and they can use this data very well to improve their websites.
BTW: this last point also means indeed that visitors of your website who have JavaScript disabled, are not visible in your Analytics stats…

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