Yahoo previously held the data of web surfers for 13 months
Search engine Yahoo is to cut the time it stores personal data from 13 months to three.
It is hoping its decision will provide a benchmark for industry. Currently Google stores data for nine months and Microsoft for six months.
International data protection officials have been urging firms to do more to protect the data of users.
Privacy advocates have welcomed the move and challenged rivals to go even further.
"I would challenge industry to move to 30 days across the board. People should demand that their information is expunged as rapidly as possible," said Simon Davies, head of Privacy International.
A recent rash of data leaks has left users concerned and organisations embarrassed, he said.
"The less time data is online means less risk that rogue companies can establish dangerously comprehensive profiles on users," he added.
Yahoo said its decision to cut the time it stores information gathered from web surfing came about following a "review of its data practices".
"This policy represents Yahoo's assessment of the minimum amount of time we need to retain data to respond to the needs of our business while deepening our trusted relationship with users," said Anne Toth, Yahoo's head of privacy.
As well as anonymising user log data, the policy will also apply to page views, page clicks and ad views and clicks.
But the search giant has reserved the right to keep data for up to six months if fraud or system security are involved.
Privacy campaigners have argued that firms are currently keeping data unnecessarily. Mr Davies is sceptical about what he described as "mixed messages" from industry.
"Only last year, firms were saying that they couldn't go below 15 months but the logic of what Yahoo has done suggests there is no reason why they can't go even lower," he said.