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Cookies can be set to last until browser exits, or they can be set to expire (be deleted) far into future. Various advertising companies actively abuse this feature - and this has led to public backlash against cookies.
You see, cookies can be created and read when any object is loaded from a web server. This includes banners and web bugs (small graphics designed to help advertisers track who is looking at their ads).
The advertising companies take advantage of this feature to set cookies on your computer so they can build up a picture of what sites you've been looking at. The banners effectively ask "have I seen this person (computer system) before?" If answer is "yes" (a cookie exists), then a notation is made in your profile on advertisers computer system.
Believe me, it does not take long for an advertising agency to build up a very nice understanding of exactly what you do on internet. Why do they want to do this? To make more money, of course.
How does this work? An advertising agency sells eyeballs. The theory they operate on is simple. The more qualified eyeballs, more likely that banners are to be clicked, and more likely that sales are to be made. Thus, if you typically surf, say, Star Trek sites, you may be interested in seeing advertisements about Science Fiction movies, and theoretically you will be more likely to purchase tickets.
Okay, why is this a problem? Do you really want an advertising agency knowing everything about your web surfing habits? Do you trust them? Do you think they will keep this information private?
Or to put it another way, these companies are making money (lots of money) based upon your eyeballs. They are not sharing that money with you - in fact, they never even asked your permission to gather information about you.
As an analogy, suppose you were reading a magazine on a park bench and someone was hiding in tree over your head, recording every page that you looked at in a notebook. How long would you put up with this behavior?
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