The Cookies that come for free (and sometimes unwanted)

At the beginning there were the banners.
These were supposed to drive the Internet marketing industry in its infancy. Scads of publishers paid scads of money based on a CPI (cost per impression) model or simply paid huge dollars for banner ads and other targeted online advertising on well-trafficked sites.
But the banner advertising technology on the Internet was not the magic bullet it was purported to be.
Then came the targeted online advertising system that worked – keyword advertising. Companies could bid on a per-click basis for certain key terms, which sent valuable traffic to its website.
There were not many raised eyebrows at this time, in terms of privacy. After all, the user was the one entering the query, and nobody suspected at the time that search engines might one day actually create individual profiles on users.
Google then took a similar idea a step further. Instead of just serving up targeted online advertising on its home page, the company created a content distribution network called AdSense. In this program, owners of websites could sign up to have the ads placed on their sites. Google would then use a “contextual” logic to determine which ads to place where. In other words, Google would “read” the content on a page and then serve up targeted online advertising in the area provided by the site owner that was relevant to the content.
Suddenly, Gmail was offered and that raised some eyebrows. Gmail, of course, is Google’s free email-based platform. Gmail gave people an (at that time) unprecedented 1 gigabyte of email space (Yahoo!, if memory serves, offered 4 megs for free email accounts and charged people for more memory). The only caveat – Gmail would use a similar advertising technology platform as AdSense, but it would decide which ads to serve up by reading through your emails.
If you didn’t want Google parsing through your email and serving up relevant, targeted online advertising, you didn’t have to use the service.

So there we all were, happily surfing away, not a care in the world. What most of us didn’t realize was that enough free cookies were being distributed to each of us.
These cookies, of course, are the ones that websites place on your computer when you visit – little packets of information that record your visit, and sometimes, your activity there.
Digital advertisers, however, saw another opportuníty for targeted online advertising. They invented advertising technology that would scour through the cookies on your personal machine, figure out what you liked and disliked by looking at the types of sites you went to, and then feed up highly targeted online advertising based upon your browsing history.
Liberally taken from...