By Maggie Shiels
Technology reporter, BBC News, Silicon Valley
Tom Coates at Yahoo: Keywords are "useful, fun or interesting"
Privacy advocates are warning of the dangers of rushing headlong into using location based services.
The Centre for Digital Democracy told the BBC that "while these services will be a powerful force in our lives they are a potential privacy nightmare."
The Centre's comments follow Yahoo's launch of Fire Eagle which lets users manage information on where they are.
"Hard privacy protection questions need to be asked," said Jeff Chester, director of the Centre.
"These services are all being sold to consumers as only providing real benefit. No one is talking about the fact they are about building and collecting more data ,not just about the content you like but where you go and where you are at the moment."
Fire Eagle, which has just been opened up to the public, helps manage location information for websites and for any device that has internet access.
Yahoo hopes thousands of more third parties sign up to use Fire Eagle
"This is a way for the user to take their location to the web, for every site on the web to become geo-aware and to respond to where users are," explained Tom Coates head of product at Yahoo's start-up project, Brickhouse.
He described the open platform like being a "switchboard that anyone can build on top of and we are the bit that helps connect to other services out there".
So far more than 50 third-party developers have signed up to offer Fire Eagle to their users, including Pownce, a micro-blogging service, brightkite, a location based social network, and DOPPLR which links travellers.
Yahoo said the service gives users complete control over their information and over which applications have access to their location. Users can also control whether an application can track their exact location, their ZIP or postcode or just the city they are in.
Every 30 days, the service will send users an email to reauthorize the sharing of their location with the enabled applications.
"Fire Eagle is neutral and open and the main thing we do is give people control to choose how much information they want to share and change it at any time," said Mr Coates.
Fire Eagle is an open platform to help users take their location to the web
"We only store your current information and don't keep any historical logs. That information will stay there until you over ride it or change it."
Some blogs note however that while users can purge information from Fire Eagle, this will not delete location data collected over time by authorised sites.
"Fire Eagle's features are beyond our comfort level as far as the average internet users is concerned," wrote Christian Zibreg of TGDaily.com.
The problem for privacy watchers is that privacy policies across the web are all very different and using a service through a third party could raise some real issues.
"Part of the problem is that Yahoo can't control what the companies they partner with do with the information," said Paul Stephens head of policy and advocacy at the Privacy Rights Clearinghouse.
"While this is an opt in service you have to be clear about the consequences of what you are opting in to. Privacy policies differ from website to website and they can be changed without warning. "
Mr Coates said as an added protection Fire Eagle lets you hide your location at times and even lie about where you are if you want to.
"People are social beings and people lie, they tell fibs. They want to buy presents for their partners, go for job interviews and have secret and illicit affairs.
"People live rich and varied lives and it's not our job to flatten that out. We are here to make the world respond to you."
While location based services are seen as the next big thing, Yahoo decided not to use it for any of its own products at this stage because it felt it would not reach the critical mass needed to be viable.
But Yahoo co-founder David Filo told the BBC if the service is a big hit, the company will add it to its products.
Privacy and security are the two major concerns surrounding these services
"If we get millions of consumers using the service and have thousands of applications, we think it will be good for Yahoo.
"We want our services to be location aware as well and obviously the more consumers that are willing to use it the more we will be able to tailor our services to them and the better it is for us."
Greg Sterling of SearchEngineLand said the added benefits of location information offers great opportunities for advertisers.
"Advertisers have yet to catch up to the possibility this space offers and Fire Eagle makes it that more explicit for them so I think we will see more targeted adverts coming into being that can take advantage of a person's location."
"This is certainly helping connect the online and offline world of consumers."