Despite the fact that Conan's show has fallen off in the ratings quite notably in the year after his show debuted in November 2010, it looks like TBS sees signs of life, and has rewarded him with a two-year extension for the show. As THR points out, despite the fact that his show averaged 2.4 million viewers in its first month, that number has declined to an average 1.1 million viewers over the past month and a half; that's still an improvement of almost 30% over late 2011, though, so the show is making up ground it lost since its debut.
Conan is still well behind most network late-night offerings, as well as The Daily Show and The Colbert Report, but TBS feels pretty strongly about Conan's ability to drive viewership on the web and through social media, for whatever that's worth. They've spent heavily on promotions for his show, and also spent a lot of money on Two And A Half Men reruns to precede it (up to two million dollars per episode), so they're definitely committed to the Conan O'Brien experience. Theoretically they'll know more about how long-term they want to go with it by the time the end of this next contract rolls around.
Are you still watching Conan? I honestly don't think I have seen any episodes of it since the premiere, but that's mostly because I'm often doing the next morning's Screened work at 11 PM. I get most of my exposure to The Daily Show and The Colbert Report through Comedy Central's website clips, but I haven't yet found a compelling reason to tune into Conan, as my late-night viewing proclivities probably peaked in high school with David Letterman. I have a hard enough time tuning in every week for a show, let alone every night.