Is Yahoo (or Gmail or Hotmail or ...) reading my email?

It's not limited to Yahoo. In fact, my favorite example is when checking my spam folder in Gmail, the ad across the top is often for some kind of cooking recipe involving Spam, the meat product.

Absolutely, if you're seeing targeted ads on your email display, then the service, be it Yahoo or Gmail or whomever, has looked at your email, analyzed its contents, picked out certain keywords and then matched it up against their inventory of available advertising.

Is that "reading" your email?

Well, yes and no.

Obviously, they had to analyze your message's contents to determine what it's about at that high level.

But then, they do exactly the same thing to filter out spam. Most common spam fighting techniques involve analyzing the body of email to determine its characteristics and intent, and make some kind of determination whether or not the email is spam.

So, yeah, that's "reading" your email too, in a sense.

Now, is someone - some person - reading your email to spy on you or see what you're saying or otherwise keep track of you?

No.

OK, maybe yes for some extremely small percentage of you under government surveillance, I suppose, but for the vast majority of people reading this the answer is a resounding NO.

As I've said multiple times here, you, as an individual, just aren't that interesting.

Sorry if that's a strike against your ego.

What if you're still concerned?

Opt out.

Depending on your level of paranoia, that could mean simply changing to a less intrusive email service, moving to some kind of encrypted email, or it could mean not using email at all. Email, by its very nature, is actually woefully insecure, and that's one reason that these techniques for spam fighting and ad serving work at all.

It's also one reason that spam exists.

But for most people, targeted ads are simply a sign of the times, and nothing more.