Yahoo adds personal search history into advertising mix

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A while ago we mentioned that Yahoo! had a behavioral element to their distributed ad network. Recently Ars Technica noted a Yahoo! news story stating Yahoo! will be

Quote:
targeting ads to users based on their surfing behavior on its site

Will this technology limit what sort of content Yahoo! will create? What happens when targeting goes afoul? If this technology proves useful is this a major downfall to Google?