Both Google and Yahoo announced recently ways to let its users “opt-out” of receiving targeted advertising on both their respective networks and across the internet at large.  Why the move so quickly?  Both companies are fearing a possible law that would require each company to force users to “opt-in” to targeted advertising, which could be detrimental to the ad-businesses of each company.

According to a Yahoo press release, the company is expanding its privacy services with the allowance of users to opt-out of customized advertising on Yahoo.com.  Before, users could only opt-out of customized advertising served by Yahoo on third party networks.  “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,” said Anne Toth, head of privacy and VP for policy at Yahoo.  “However, we understand that there are some users who prefer not to receive customized advertising and this opt-out will offer them even greater choice.”

Google is following the same path as Yahoo with a similar opt-out policy, though they haven’t made it as public.  Their announcement came in a long introduction to it’s DoubleClick integration with its AdSense network, which is an initiative to place additional cookies in user’s browsers that visit any site in its vast network.

The moves on behalf of both companies come in response to a Congressional inquiry about customization sent to 33 companies from the House Energy and Commerce Committee.  It raised questions about user-privacy and the ways search engines use your information to target their highly-lucrative advertising.  If the government would enforce some kind of law that would force search engines to make its users opt-in to advertising before the ads could be served to them, it would put a dramatic damper on their revenue.  By taking a preemptive approach like they have, Google and Yahoo are trying to make the feds happy while protecting the bread-and-butter of their business plans. 

Users are far less likely to take the time to opt-out of advertising, which is what the search engine companies are hoping for.  On the flip-side, it would take a lot of time, effort, and hoping on the part of the search engines to get users to actually opt-in to receive targeted advertising.  It should be interesting to see what happens in the fight against privacy, and whether the big guns in the industry have what it takes to take on the luminous possibilities of proposed laws.

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Entry was posted on Saturday, August 9th, 2008 at 5:54 pm under Google, Security, Yahoo!.

Read more entries by Justin Montgomery.
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