Interest-based advertising will allow advertisers to show ads based on a user's previous interactions with them, such as visits to advertiser website and also to reach users based on their interests (e.g. "sports enthusiast"). To develop interest categories, we will recognize the types of web pages users visit throughout the Google content network. As an example, if they visit a number of sports pages, we will add them to the "sports enthusiast" interest category.

The fun part is that since this works with cookies and the code used for ads is appearing on sites outside Google, these sites now have to update their privacy policies to warn people about the tracking. While site owners can opt-out of the mechanism that will be in effect in the coming weeks, they are warned that they are going to get less ads from Google (and that's a warning not a threat ;))

Site visitors can also opt-out from the service in two ways: either setting another cookie or downloading a plugin. One can imagine some people will not be happy with either option.

Behavioral-based advertising is not new though. Similar techniques have been used by other advertising networks for several years now (and without opt-out mechanisms). But in the end, what do you really have to hide? ;)