Yahoo lets users opt out of targeted advertising

In response to a Congressional inquiry about targeted advertising, Yahoo announced Friday that consumers will be able to opt out of customized advertising on Yahoo.com.

The news comes one day after Google announced the addition of DoubleClick ad tracking across its sites with an opt-out capability for users.

The House Energy and Commerce Committee on August 1 sent a letter to 34 companies about concerns that privacy protections already in place for consumers may not be applicable to customized advertising. The letter asked the companies to respond to 10 questions about their targeted ad policies, including, "If your company did not specifically or directly notify affected consumers of the opportunity to opt out, please explain why this was not done."

In its response to that question, Yahoo said, "Yahoo has a long history of providing clear notice to our users via our Privacy Policy and is always exploring additional avenues for enhanced notice."

In its response letter, the company also expounded on the benefits its customized ads bring to customers. It noted that "consumers have and continue to respond strongly to Internet products and services that are customized to their interests."

In the corresponding press release, Anne Toth, Yahoo head of privacy and vice president for policy, said, "Yahoo strongly believes that consumers want choice when customizing their online experience and they have also demonstrated a strong preference for advertising that is more personally relevant to them."

Yahoo's letter argued that targeted ads not only enhance users' experience with more relevant ads, but also support "a diversity of voices on the Internet."

"Bloggers or families who want to occasionally post content are generally subsidized by the advertising business model through free or reduced-cost hosting, and also through the ability to have text, graphical and even video ads appear on the site," the letter says. "This ability to make money while sharing views increases the number of viewpoints that can be taken in public debates, and surely enriches our public conversation as a nation and as a global society."

Jeff Chester, executive director of the Center for Digital Democracy, called Yahoo's description of the benefits of targeted ads "disingenuous and self-serving."

"No one is saying that there can't be targeted marketing," he said, "but individual users should have the right to decide what information can be collected and how it can be used for online targeting."

Chester said Yahoo's new opt-out option was likely in response not only to the letter from Congress but also to the Justice Department's review of Yahoo's advertising deal with Google.

The Center for Digital Democracy filed a complaint in 2006 that spurred Congress' review of targeted advertising, according to Chester. He said Congress should prompt the Federal Communications Commission to create a national policy calling for an opt-in standard. "We can have some reasonable safeguards," he said.

By the end of August, users should be able to access Yahoo's opt-out option at the Yahoo privacy center, which is linked on most Yahoo network pages. The opt-out will also be available through a link in public service announcements found in online ads throughout the Yahoo network. Customers can already opt out of customized advertising served by Yahoo on third-party networks.