• by Laurie Sullivan , Staff Writer @lauriesullivan, February 24, 2010

Google has been known for collecting mounds of consumer data in each user search for products and services. Still, the deal between Yahoo and Twitter announced this morning could have those tracking privacy concerns paying more attention to the No. 2 search engine.

In the new partnership, Yahoo will integrate Twitter streams across Yahoo properties. To access advanced services, people will need to sign into their Yahoo account -- a sweet deal for the Sunnyvale, Calif., company, which collects an "incredible" amount of data on its more than 600 million users worldwide across Yahoo's search engine, profiles and properties like Hot Jobs, Yahoo Personals, and Yahoo Shopping.

Yahoo has begun to dynamically serve content based on the data it collects from browsers behind people searching its engine and network of sites. This means Yahoo will serve up different content to me, compared with you. The data collected also helps advertisers determine the ads they buy. So, a sports junkie might see an increase in the amount of sports news or advertisements when visiting Yahoo.com.

Since Yahoo launched its new homepage last year, "we see longer engagement times on sessions, higher impression rates and more page views," says Ramsey McGrory, vice president of Yahoo North American Marketplaces.

In fact, since Yahoo began pairing content optimization technology with editorial, the company has seen click-through rates in the Today module on the homepage more than double. Additional improvements in the works aim to make the technology serve up more "personally relevant" content, according to McGrory.

Aside from content, Yahoo has been focusing on targeting and measurement, analyzing data integrated from partners, such as Nielsen. Companies have begun to spend more time with Yahoo on audits, such as audience or media verification, to get more insight into return on investment.

At the same time, McGrory says, agencies are no longer depending on ad networks or publishers to provide the targeting data. The holding companies are building data warehouse engines to define audiences, and that data now gets combined with third-party audience segments, both offline and online.

McGrory says Yahoo is consolidating all the data onto "one user grid" that will allow the company to determine what data to keep and discard. This means Yahoo will enable the integration of search data, with data from advertiser and third-company data collectors. Its databases crunches tons of terabytes to determine the best content and ads to serve up for any given person searching its sites.

Audience definitions have not been accurate in the past. Yahoo and the holding companies are attempting to change that. It's less about one particular piece of data, and more about the frequency of serving up and combining ad and content.

McGrory couldn't provide any insight into how the agreement with Microsoft Bing to power Yahoo Search's backend will change this strategy. He says it's just too early to tell if it will have any influence.