Yahoo is giving web users the ability to control which targeted ads they receive.
The beta launch of Yahoo's Ad Interest Manager comes on the tails of similar tools unveiled by other websites including Yahoo's competitor Google.
Yahoo said user demand is what really drove the company to create the privacy tool, said Anne Toth, Yahoo's vice president of policy and head of privacy.
"We're really happy about being able to give this kind of transparency and control to users," she said.
"I'm certainly hearing from users that they are demanding greater control of their online experience."
Yahoo has generally pressed for industry self-regulation instead of government regulations about privacy and online advertising.
"For a fast-moving industry like the internet, I tend to believe that self-regulation is still the best way forward," Toth said.
The new Ad Interest Manager replaces a page allowing Yahoo users to opt out of behavioral tracking on its third-party ad network. Users can still opt out of all tracking, but the new tool gives them greater flexibility, Toth said.
The opt-out page was "a bit of a blunt instrument", Toth said.
"It was sort of an all-or-nothing, turn it on, turn it off."
The ad tool will allow users to select from close to 400 interest categories from which to receive advertising.
It also provides users with Yahoo's "educated guesses" about what types of ads they want to receive. Yahoo also tells users what activities are used to judge consumers' interests and deliver them ads, Toth said.
The tool gives an "unparalleled view into those categories", Toth said.
Google announced a similar service called Ads Preferences Manager in March, when it launched its own behavioural advertising service. Google's tool allows users to view, delete and add interest categories, based on the ads they want to see.
But Yahoo's Ad Interest Manager appears to offer users even more information than Google's tool, said Ari Schwartz, vice president and chief operating officer of the Center for Democracy and Technology, a privacy and digital rights group.
Schwartz praised Yahoo's new tool, saying it appears to be a useful service for users concerned about their privacy with targeted ads.
"Having a competition around who makes the better [privacy] access controls is one of the best things that we could hope for," he said.
Privacy groups will have to pay attention to the growing number of privacy controls available, however, Schwartz said.
With Yahoo, Google and a handful of other companies now providing fine-tuned privacy controls, the next step for the online ad industry should be a standardised tool, he said.
The Network Advertising Initiative has a cookie-based tool that allows web users to opt out of behavioral advertising on 35 ad networks, but Schwartz expects more companies to offer detailed controls.
Without some standardisation, that could lead to consumer confusion, he said.
Still, Schwartz praised the early attempts at fine-tuned controls by Yahoo, Google and others.
Web users should be able to turn on and off types of advertising they receive without waiting for the ad networks to figure out they're no longer interested in seeing a certain type of ad, he said.
"I'm buying a new car tomorrow," he said. "After tomorrow, I don't really want to see new car ads. That'd be the absolute worst time for new car ads."
Yahoo, by allowing users to provide their preferences, should be able to provide a better service for advertisers and Yahoo users, said David Zinman, Yahoo vice president and general manager of display advertising.
"Part of our business is delivering relevant ads," he said. "Advertisers won't pay us unless the ads are relevant."
Yahoo expects that many users won't adjust the settings in the Ad Interest Manager, but others will have strong interest in the service, Toth said.
"We're developing it with the intention that users should use it and interact with it, and I've personally found that the more users are aware and engaged with these kinds of things, the more comfortable they are with the whole process of customization of advertising," she said.
"We certainly hope they do use it."