Definition: “Bounce rate is the percentage of single-page visits or visits in which the person left your site from the entrance (landing) page.” Google Help.

Basically, bounce rate is a type of metric that helps us measure the quality of each visit, where a high bounce rate usually indicates that the entrance pages are not relevant to our visitors.

Time or Action?
Google Analytic’s bounce rate is calculated based on the actions performed per visit and time is not a factor.

Picture this:

A visitor that spent 5 minutes with only one page view is considered as a bounce. However, if that visitor spent only 10 seconds with 2 page views, this isn’t considered as a bounce.

Google Analytics Session length
A single session will start upon getting to a web page and will be terminated after 29 minutes of inactivity.

Picture this:

If the user chooses to leave the site and navigate to another website, the session will still continue for a maximum of 29 minutes. As long as the user returns to the initial site and makes a click, it will not be considered as a bounce.

Is opening an external link in a new window considered a bounce?
This will depends on how the external link strategy is handled.

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Usually, if your visitors click on link that opens a new window, it will be considered as a bounce. (Provided the user does not come back within 29 minutes, see above.)

However, if your visitors click on an external link that is handled by your script which sends a HIT back to GA before directing the user to the external site, it will not be considered as a bounce.

Check out more about bounce rate from GA Evangelist Avinash Kaushik:
Google Analytics – Bounce Rate: The Simply Powerful Metric -