Yahoo, Bucking Industry, Scans Emails for Data to Sell Advertisers

Web giant analyzes more than 200 million inboxes for clues about what products people might buy—a practice much of Silicon Valley has declared off-limits

The U.S. tech industry has largely declared it is off limits to scan emails for information to sell to advertisers. Yahoo AABA +0.24% still sees the practice as a potential gold mine.

Yahoo’s owner, the Oath unit of Verizon Communications Inc., VZ +0.20% has been pitching a service to advertisers that analyzes more than 200 million Yahoo Mail inboxes and the rich user data they contain, searching for clues about what products those users might buy, said people who have attended Oath’s presentations as well as current and former employees of the company.

Oath said the practice extends to AOL Mail, which it also owns. Together, they constitute the only major U.S. email provider that scans user inboxes for marketing purposes.

.. Yahoo’s practice began more than a decade ago and expanded over the years, said a person familiar with the matter. The company has increasingly looked for new ways to wring revenue out of its aging portfolio of web properties, which have stagnated in the era of smartphones and social networking.

.. When Verizon created Oath last year, it envisioned the new unit as a future advertising rival to Google and Facebook Inc. for its potential to marry data on Verizon’s vast pool of wireless subscribers with Yahoo’s highly trafficked online hubs, Verizon executives have said.

Oath owns dozens of popular websites, such as HuffPost and Yahoo Finance. It helps advertisers show messages on these sites as well as across the web, using a variety of ad-placement services.

 .. Email scanning has become one of the company’s most effective methods for improving ad targeting, said Doug Sharp
.. Mr. Sharp said that being served ads is part of the trade-off users make in exchange for free online services, and that Yahoo’s research shows they prefer ads that are relevant to them.
.. Oath promises to give advertisers an edge by identifying groups of users who have bought certain products or services based on the receipts, travel itineraries and promotions in their inboxes
.. Google said it stopped targeting ads based on Gmail data last year, saying it wanted users to “remain confident that Google will keep privacy and security paramount.”
.. Google already collects so much data from its search engine that it no longer needed to rely on email data
.. Oath’s email scanning appears to go a step further than Google’s former system, by creating interest profiles of users based on the data in their email and using that intelligence to target them elsewhere on the web.
.. Yahoo Mail users who receive frequent emails about driving for Lyft Inc. are sometimes placed into a “self-employed” audience, Mr. Sharp said. Some people who bought several plane tickets in the past year are labeled frequent travelers
.. Oath uses receipts in Yahoo Mail inboxes as proof that an ad campaign convinced a user to buy a product
.. Oath’s new privacy policy prevents users from filing class-action suits and instead requires them to pursue their grievances through arbitration or small-claims court.
..  In 2015, Amazon stopped including full itemized receipts in the emails it sends customers, partly because the company didn’t want Yahoo and others gathering that data for their own use

Facebook to Banks: Give Us Your Data, We’ll Give You Our Users

Facebook has asked large U.S. banks to share detailed financial information about customers as it seeks to boost user engagement

The social media giant has asked large U.S. banks to share detailed financial information about their customers, including card transactions and checking account balances, as part of an effort to offer new services to users.

Facebook increasingly wants to be a platform where people buy and sell goods and services, besides connecting with friends. The company over the past year asked JPMorgan Chase JPM +0.33% & Co., Wells Fargo & Co., Citigroup Inc. C +0.28% and U.S. BancorpUSB +0.43% to discuss potential offerings it could host for bank customers on Facebook Messenger, said people familiar with the matter.

Facebook has talked about a feature that would show its users their checking-account balances, the people said. It has also pitched fraud alerts, some of the people said.

.. Facebook has told banks that the additional customer information could be used to offer services that might entice users to spend more time on Messenger
.. Facebook said it wouldn’t use the bank data for ad-targeting purposes or share it with third parties.
.. Banks face pressure to build relationships with big online platforms, which reach billions of users and drive a growing share of commerce. They also are trying to reach more users digitally. Many struggle to gain traction in mobile payments.Yet banks are hesitant to hand too much control to third-parties platforms such as Facebook. They prefer to keep customers on their own websites and apps.

.. As part of the proposed deals, Facebook asked banks for information about where its users are shopping with their debit and credit cards outside of purchases they make using Facebook Messenger,

.. Alphabet Inc.’s Google and Amazon.com Inc. also have asked banks to share data if they join with them, in order to provide basic banking services on applications such as Google Assistant and Alex
.. Bank executives are worried about the breadth of information being sought, even if it means not being available on certain platforms that their customers use. It is unclear whether bank customers would need to opt-in to the proposed Facebook services or what other privacy protections might be offered.
.. In recent years, Facebook has tried to transform Messenger into a hub for customer service and commerce,

Is Clarence Thomas the Supreme Court’s Future?

The conservative justice’s obsession with the past was on full display during the recent term.

.. It’s going on 50 years since Warren E. Burger, President Richard Nixon’s chosen chief justice and the first of his four Supreme Court appointees, took his seat in June 1969, initiating the turn to the right that continues to this day.

.. He has long insisted that the only legitimate way to interpret a constitutional provision is to give it the “public meaning” it supposedly had at the time it was written. So in 2011, for example, he dissented from a majority opinion written by Justice Antonin Scalia that struck down, on First Amendment grounds, a California law that made it a crime to sell a “violent” video game to a minor without parental permission. “The founding generation,” Justice Thomas wrote in dissent, “would not have considered it an abridgment of ‘the freedom of speech’ to support parental authority by restricting speech that bypasses minor’s parents.”

.. In another case, Justice Thomas reiterated his vigorous and longstanding objection to the “negative” Commerce Clause. This is a doctrine that dates at least to the mid-19th century, prohibiting states from discriminating against out-of-state enterprises in favor of their own residents. It is based on the court’s “negative” interpretation of the Commerce Clause, which empowers the national government to regulate interstate commerce and so, by extrapolation, deprives the states of that power. The court has applied it dozens of times over many years as a bulwark against a feared “Balkanization” of the country. But it is not, as Justice Thomas has frequently pointed out, actually in the Constitution’s text.

..  Justice Thomas took aim in another solo concurring opinion at the court’s approach to what is known as severability, which dates to the 1850s. Under this doctrine, when the court finds that a portion of a statute is unconstitutional, it goes on to decide whether that portion is severable from the remainder of the law or whether the entire statute has to fall. The question is one of legislative intent: Would Congress have enacted the law without the offending provision? This was an important question in the first Affordable Care Act case and in the past term’s decision that permitted states to authorize sports gambling.
.. In a second Fourth Amendment case, Justice Thomas dissented from a majority opinion by Chief Justice John G. Roberts Jr. that the government needs a warrant in order to search the cellphone location records that wireless carriers automatically collect and store as their phone-carrying customers go about their daily business. In deciding that the government’s acquisition of these records was a search within the meaning of the Fourth Amendment, the majority applied the 50-year-old “reasonable expectation of privacy” test, which does not depend on the government’s physical entry onto a suspect’s property.

.. Taken as a whole, as the work of a single justice during a single Supreme Court term, they paint an extraordinary picture of a judge at war not only with modernity but with the entire project of constitutional law.

.. Young people graduating from law school today have never lived in a world in which Clarence Thomas was not on the Supreme Court. The very fact of his position and his persistence makes opinions that would have been hooted out of the room a few decades ago look respectable in many eyes. In 1997, in Printz v. United States, he was the first modern justice to assert that the Second Amendment guarantees an individual right to own a gun, and to invite anyone interested to bring the right case to a Supreme Court newly open for Second Amendment business. It took a mere 11 years, and we were handed District of Columbia v. Heller.

.. “Clarence Thomas Is the Most Important Legal Thinker in America.” I did a double take. How could the estimable Mr. Millhiser sign his name to such an exaggerated claim? But his argument was not that Justice Thomas, who recently turned 70, is winning victories today, but that he is paving the way for victories down the road — and perhaps not all that far down the road. Observing that 20 percent of Trump-appointed appeals court judges are Justice Thomas’s former law clerks, Mr. Millhiser wrote, “Thomas lost the war for the present, but he is the future of legal conservatism.”

The Conference Call That Shook Investor Faith in Facebook

Chief Executive Mark Zuckerberg opened the call just after 5 p.m. Eastern time by saying the company had​“a solid quarter.” He crowed about Instagram, calling it an “amazing success” and said he believed that the unit grew twice as quickly under Facebook than it would have solo. About 12 minutes into the call, Chief Operating Officer Sheryl Sandberg chimed in, providing her usual litany of examples of how advertisers were adopting its various ad tools.

There were few signs that anything major was amiss.

And then around 5:20 p.m., Chief Financial Officer Dave Wehner addressed analysts and dropped one bombshell after another, rattling investors and raising red flags about whether Facebook’s powerful moneymaking machine is starting to sputter.

First he said the advertising revenue growth slowed down more in Europe than anywhere else in the world partly because of new privacy laws there. That was a bit jarring, as most investors had come to believe the new law that went into effect in May would have minimal, if any, impact.

Then, he noted that the overall revenue growth rate wasn’t just slowing in the second quarter, but would continue to do so in the third and fourth. He partly blamed “currency headwinds” and new privacy options for users but also revealed that new ad formats such as those within Instagram Stories weren’t pulling in the same amount of money as ads shown in the Facebook and Instagram feeds.

.. Ads shown in feeds are where Facebook generates the bulk of its revenue. Now, Facebook executives were saying that people were spending more time using a less-lucrative product.
Operating margins, Mr. Wehner added, would fall ​to the “mid-30s” from about 44% currently over the next few years, stemming in part from investments in security and safety

.. Mr. Wehner and Ms. Sandberg noted that Facebook had yet to feel the full effects of the new European privacy laws. Mr. Wehner pointed out that Facebook would see a hit to revenue growth owing to changes to its products that would boost privacy.

“The question is will this monetize at the same rate as News Feed?” Ms. Sandberg replied to one question about the moneymaking potential of Stories. “And we honestly don’t know, we’ll have to see what happens.”

.. Ms. Sandberg replied: “I mean, even at decreasing growth rates, we are still growing and predicting growth at very healthy rates.”

.. they must grapple with the question of whether Facebook, too, has limits.

.. “While the company is still growing at a fast clip, the days of 30%+ growth are numbered.”