Early last week, Dropbox changed its Terms of Service and set off a bit of a tempest in a teacup.  Although since then, it’s become clear that the “uproar” didn’t bother investors too much, as the company has been recently valued at $5 billion or more, but it got us reading way too far down into the fine print, nonetheless.

Now there’s more TOS hoopla, as Yahoo! has made some fairly significant changes to their New Mail TOS, in the process of pushing its users to upgrade to the New! Faster! experience:

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The fine print in the gray box reads:

By clicking the button above, I certify that I have read and agreed to the Communications Terms of Service, and Yahoo! Privacy Policy. To deliver product features, relevant advertising and abuse protection, Yahoo!’s automated systems scan and analyze all email, IM and other communications content.

The relevant changes are laid out in a Yahoo! Mail Privacy FAQ.

So now both Yahoo!, with their New Mail, and Google, with Gmail, automatedly scan your email, looking for keywords with which to “better serve you” advertising within their mail clients.  It was pointed out to us that “(this) leaves Hotmail as the last of the three leaders in this space to not have this policy”, and it’s good to know that Hotmail doesn’t scan your email for advertising keywords.

But in digging through the various Yahoo!, Google, and Hotmail TOS (thanks for that, by the way), we vaguely remembered something similar from the deep dark past of Windows Live, and sure enough, after digging around some, up popped Windows Live Mail desktop Active Search.  Our former colleague Harrison Hoffman interviewed members of the Live Mail desktop team about it back in September of 2006.

If we remember correctly, Active Search never got out of beta (and it’s sad that the Windows Live Mail Spaces blogs have been lost in the transition to WordPress.com, or at least the links are broken), and it worked a bit differently, by searching client side on your computer for keywords.  Here’s a Channel 9 video with an old friend, Bryan Starbuck, showing off Active Search:

We do remember testing Live Mail desktop with Active Search, and again, if we remember correctly, it never worked very well, it was awfully buggy.  Of course we’re glad that Hotmail touts itself as being a champion of privacy now (and with good reason), but we can’t help but wonder what might have been had it worked better back in the good ol’ days of Windows Live.

What do you think, do you worry about privacy with Gmail and now Yahoo! Mail?  Does Hotmail protect your privacy differently and better than the other services?  And does it matter to you whether automated scans occur within your mail, or do you even care?