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Yahoo lets consumers opt out of targeted advertising. Everyone rejoice?

August 8, 2008 | 12:05 pm

Yahooo Yahoo said today it would allow consumers to opt out of targeted advertising on Yahoo.com amid increasing congressional scrutiny about consumer privacy on the Web.

But the announcement seemed to please nobody: Privacy advocates said the move didn't go far enough because Yahoo would continue to collect data about users; publishers worried that getting rid of customized ads would hurt their business model. And in a letter to the House Energy and Commerce Committee, Yahoo waxed poetic about the benefits of customized content, implying it didn't think many would opt out.

"The advertising model has made Internet content and services available to millions of people in the United States and around the world -- for free," the company said in the letter.

Web publishers such as Yahoo collect information as you browse the Internet, such as what websites you visit, what types of things you are searching for and what ads you click. They use that information to serve ads somewhat relevant to your interests. Someone who visits many car websites, for instance, would receive ads about cars rather than about plants or diapers.

"Customized advertising gives users a better experience and helps them save time and money," said Anne Toth, VP for privacy and policy at Yahoo.

It also helps websites make money, said Brian Gruber, CEO of Fora.tv, which delivers users videos from public forums in a business model dependent on targeted advertising. Targeting allows "the opportunity to support content that otherwise would not be supported with mass media economics," he said.

But Congress isn't so sure. The House Energy and Commerce Committee last week sent a letter to 34 companies regarding "the growing trend of companies tailoring Internet advertising based on consumers' Internet search, surfing or other use." Legislators are also closely considering privacy issues regarding a proposed advertising deal between Yahoo and Google.

Yahoo's announcement today was partially in response to these concerns, Toth said, although the company had been planning to revise its policy for months.

The news is indeed a response to Congress: Yahoo doesn't want lawmakers to stomp on its deal with Google, said Jeff Chester of the Center for Digital Democracy.  But the new policy won't protect consumers, he said, because Yahoo will continue to collect information about users, even if they opt out of targeted ads.

"Yahoo's argument that without digital data collection there would be an absence of free editorial content online is disingenuous and self-serving," he said.

Yahoo already allows users to opt out of customized advertising it delivers to third-party sites such as EBay, this announcement extends the opt-out to Yahoo-branded sites. Microsoft already allows users to shut off targeted ads.

-- Alana Semuels

Semuels, a Times staff writer, covers wireless, marketing and the L.A. tech scene

Photo: Paul Sakuma / Associated Press

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