Yahoo! Offers Ad-Targeting Privacy Controls

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Yahoo! today unveiled a new mechanism for consumers to gain insight into how their online activities are monitored and collected for marketing purposes, offering them a chance to edit their profiles and opt out of interest-based advertising.

The company's Ad Interest Manager, released today in beta, displays a list of categories, such as entertainment, finance, and politics that reflect a broad set of interests that inform the types of ads Yahoo! serves across its network of sites, inviting users to convey their preferences in each category with on and off buttons.

"Ad Interest Manager will show users what interests we think they have, and also let them edit and change those interests to reflect the most up-to-date information," Yahoo Vice President Anne Toth said in a statement. "Importantly, users who don't want interest-based ads can turn them off completely."

The timing of the release comes at a time of heightened regulatory and legislative scrutiny for online data collection. Today, the Federal Trade Commission is holding the first of a series of workshops examining consumer privacy, with a specific focus on the ways that Internet companies collect, store, and use information about people's online activity.

Many advocacy groups are hoping that the FTC's inquiry will lead to tougher industry regulations, and have also been urging members of Congress to enact legislation that would establish online safeguards to protect users' privacy.

Yahoo's Ad Interest Manage closely follows Google's release of a privacy dashboard, a similar product that offers users a glimpse of the information the search giant associates with users' accounts on its various Web properties, such as YouTube and Gmail.

In addition to the category preferences, Yahoo's new tool shows a summary of people's activities, including the general topics of search queries, and the frequency of visits to some of its Web properties, such as Yahoo! Finance and Mail.

"Google and Yahoo! should be commended for being more transparent," Joel Kelsey, a policy analyst with Consumers Union, said at this morning's FTC meeting.

Much of the talk at the agency concerned the difficulty of explaining the data flow of consumer information on the Internet to non-technical members of the public.

While it is generally understood that advertising supports most of the free content and services on the Web, consumer advocates worry that the unseen parsing and sharing of data that goes on behind the scenes poses a greater threat to privacy than most people know.

"There's a difference in consumers' brains between Google and Yahoo! as a search engine and Google and Yahoo! as an ad network," Kelsey said.

Ad networks, of which Yahoo! and Google are among the largest, collect information about users' preferences in an effort to serve them more relevant messages, which are more likely to resonate and in turn can command a higher premium from advertisers.

In addition to subsidizing free content, targeted ads also make for a more enjoyable Web experience by offering information that users are more likely to find interesting, the companies say.

But the privacy questions linger, leading to concerns among some members of the industry if the FTC might abandon its self-regulatory approach in favor of a more hands-on policy.

Alan Davidson, Google's director of public policy, praised Yahoo's new tool this morning as an example of "innovation in the space," suggesting that companies are beginning to respond to the demand for simpler and more transparent privacy controls.

He added, however, that "it's clear that a lot more work needs to be done."

Yahoo's Ad Interest Manager is initially only available in the United States, but the company said it plans to roll out the feature in the United Kingdom and Europe soon.

A future version will also enable users to submit their own areas of interest that weren't generated automatically.

Kenneth Corbin is an associate editor at InternetNews.com. Based in Washington, D.C., Kenneth's coverage areas range from government regulation to e-commerce and online media.