I don't use freemail services other than when on holiday* or if I'm away from my computers for an extended period. I recently set up a gmail account as it seemed like a bright idea, especially with the whole google docs thing and their extensive storage capacity.
But... it's obvious to me that google is actually 'reading' my email. The 'sponsored links' are disturbingly accurate to the email content. As an example, today I was discussing prices and other details of a specific print job with a client. That is, how many pages, quantities, what size, etc, etc.
Ads appeared that even included prices from different companies for exactly that job.
Whilst G disclaim that 'No humans will read the content of your email in order to target such advertisements or related information' I do find the demographic/statistical aspects a bit haunting.
I've always said that I would tolerate advertising if it was specific to my tastes in order to do/see x cheaper but when I actually encountered such things, I do find it somehow invasive.
More info: http://mail.google.com/support/bin/answer.py?answer=6603
* An odd word to type, not sure what it means anymore.
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