Following up what John posted last week about AOL’s inadvertent release of user-specific search records, here’s an interesting article from today’s New York Times on what advertisers are planning to do with this data.

Earlier this year, Yahoo introduced a computer system that uses complex models to analyze records of what each of its 500 million users do on its site: what they search for, what pages they read, what ads they click on. It then tries to show them advertisements that speak directly to their interests and the events in their lives. …

Collectively, a person’s Web searches, it turns out, can create an eerily intimate portrait — one that some privacy advocates say should never be assembled and stored in the first place.

Still, Web companies continue refining their techniques. Advertising on search engines is already a $14-billion-a-year business because the ads can be so closely tied to what people are looking for. Yahoo’s system is meant to use search queries and other actions to select ads people see while checking their e-mail and reading other pages.

AOL is working on a similar system to display ads for products related to a person’s Web search history. MSN from Microsoft just introduced technology to do the same. Other companies use systems that bring together information about users from across many sites. Internet companies call this behavioral targeting, and it is based on the insight that knowing what people do online can be more valuable to a marketer than knowing how old they are or what they do for a living.

Man, I can’t wait to see what user 711391 gets pitched.