In an attempt to boost its advertising rates, Yahoo expanding on its traditional customer demographics and geographic location focus for targeting ads to advertisements tied to the surfing behavior of Yahoo users.

By tracking behavior, Yahoo can then charge advertisers more for an ad based on the premise of the three advertising R's -the right ad at the right time at the right place. Yahoo currently tracks a user's search queries, that person's movement through various Yahoo sites and the specific ads the person clicks on. The company then uses that information to decide on the ads that are most appropriate for that user. Such targeting behavior occurs literally on the fly, ensuring that the three advertising R's take place instantaneously.

Traditional search functions at both Yahoo and its search engine rival Google Inc currently base ad placement on words searched. For example, a person searching for information about boats online would see an ad focused on boats as well as ads that appeal to that demographic group. However, the new Yahoo behavioral targeting would use other factors to provide an even more sophisticated set of ad options based on that users prior ad selections. Though looking for boats, the user may have in the past clicked on ads related to the latest technology toy offered on the site. Using behavior based advertising techniques will cause certain ads to appear in front of a specific customer regardless of their keyword search results.

Yahoo insists that the anonymous ad targeting based on user behavior will not be made available to respective advertisers. But by offering both traditional text-based keyword search advertisements as well as brand-reinforcing ads, Yahoo will be able to raise its advertising rates for the site. In addition, by targeting surfing behavior along with keyword search options, Yahoo is likely to expand its current ad base significantly.