In its new privacy policy, Yahoo said that it will cut the amount of time it retains data about online user behaviour from thirteen months to 3 months. The company would remove parts of users’ IP addresses and change cookies and other data used in tracking personal preferences for 3 months, applying the policy to search log data as well as page views, page clicks, ad views and ad clicks.

The policy is introduced in response to pressure from regulators in Europe and other parts of the world, who have questioned the necessity for search engines to retain the data on users. The European Union has suggested for companies to keep data no longer than 6 months and advocated the companies to adopt an industry-wide standard. Microsoft keeps search data for 18 months but stated last week it would support a standard of 6 months. Yahoo’s proclamation may put further pressure on other companies to tighten the standard even further. In September, Google said it would reduce the time it stores search information from eighteen months to 9 months.

Search companies have preserved data in the past with the purpose of offering more precise and relevant search results based on user preferences and likewise to more effectively target advertisements based on location, as well as demographics and search habits.

According to Yahoo, the 3-month policy represents the minimal amount of time necessary to conduct their business. The policy is expected to be implemented starting next month and will be applied to all of Yahoo’s service by mid-2010.