This is a post that was written by a very good friend named Cameron Peron (check out the man and the blog). I took the liberty of copying his post and telling you a little more about the man.

I had first met Cameron through a mutual friend, Roi Carthy, who thought we should hook up, both being veterans of the online advertising industry. A few months and countless emails as well as meetings later, I am proud to call Cameron a friend. Not only is he a good friend, he is also a brilliant analyst with a deep understanding of how things work in the online world, on top of being extremely business savvy with an amazing insight into emerging markets. I hope you enjoy ;-)

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Recently both Google and Yahoo made steps to allow users to opt-out of personalized ad severing provided of cookies. As of a few days ago, Google implemented a procedure effectively allowing users to opt-out their from extended content network including affecting AdWords, Google Syndication as well as DoubleClick.  Yahoo is following suit with full opt-out implementation at the end of August.

This bold step by the two biggest names in search are not in response from market factors - but rather a hearing held by the Senate Commerce Committee. In short the hearing questions 1) the ability of large companies to be responsible for data they collect on behalf of their users and 2) the arbitrage between a user’s understanding and of what is being shared about them against actual data collection and interaction.

Do we really care? In the last 15+ years we’ve grown accustom to sharing highly personal information about ourselves over the internet.  Privacy has always been a significant issue since the first days of connecting online via BBS, prodigy’s internet service (remember them?!) and the like.  Granted, privacy highly valued in the minds of every American - which might explain why similar inquires haven’t been made to scale in other Western countries.  However, since those “early” days so much has happened:

• We subconsciously trust companies at an “evaluation” level. We’ve traded real personal information in return for free web-based internet accounts, social networks, shopping portals and many other services that make our lives easy, fun and exciting.
• That trust is tested in real time. The internet has made Adam Smith economics without the big “G” for government a real thing.  When an internet based business tests the limits of what it will do with its user information - the inherent nature of the internet both allows us to learn about it, and enables us to to act on it.  Case in point the 2006 AOL data scandal.  By in far in Western countries, such exploitations of a nurtured relationships haven’t happened on a doomsday level scale.
• Network effect of sharing information.  With more than 70% of American homes connecting online we’ve come to a near subconscious understanding that sharing information about oneself isn’t that bad given the fact that everyone else does it too.   This effect is highly scaled in all dimensions of American society - as well as other Western countries.

The real issues at hand should be protecting - not distracting people.

Seriously. With google and yahoo handling zillions of searches every day, that fact that non-identifiable information regarding our internet browsing behavior in exchange for convenient search and targeted ads hasn’t actually harmed anyone. I agree that unsolicited advertising via spam and other annoying less than scrupulous tactics are evil; and the government holds a much needed place in consumer protection.  However, targeted ad-serving enabled by cookies truly makes the experience of search more effective for the user (anyone) and ROI effective for a provider (google).

The implementation of cookies have made advertising more like marketing. Imagine a situation where the communication between a user and advetiser is completely market driven, placed with unparalleled targeting and actively searched by a targeted user base.  Yes this freaks out offline advertisers :).  If the model wasn’t appreciated  - the market would move in mass to other search providers without government based initiation.