• The Washington Post, Friday, August 8, 2008 11:31 AM

The Washington Post is reporting that Yahoo will allow users to shut off targeted advertising on its Web sites, a decision that comes in direct response to a congressional committee's concerns about consumer privacy. Indeed, last week, the House Committee on Energy and Commerce asked the Web giant and 32 other Internet companies to provide more information about the information they collect from Web users and how they use it to target advertising.

Is Yahoo shoving its foot in its mouth by allowing users to shut off targeted advertising? After all, targeting commands higher ad prices, so doesn't the new policy make it harder for Yahoo to make money? Company executives claim that offering more privacy options could help Yahoo attract more users. They add that evidence supports the claim that only a small fraction of Web users choose to opt-out of customized advertising.

Yahoo confirmed that the announcement was designed to coincide with the questions from Congress. "What Yahoo is doing is better than before but I think most consumers would expect that if they 'opt out,' then the information will no longer be collected," said Ari Schwartz of the Center for Democracy and Technology. Officials countered by saying that data collection is necessary for Yahoo for an array of business purposes besides advertising.

Read the whole story at The Washington Post »