Last month, after Crosscut ran my piece about Paul Allen and growth in the city, a reader wrote me a note, which I opened in Gmail, Google's Web-based e-mail program. In the subject line, the reader wrote "Allentown," a gag reference to the billionaire's big presence in the South Lake Union neighborhood of Seattle.

A funny thing happened to that note. Before I got it, Google had scanned the content, noticed the reference to "Allentown," and placed near my inbox a small text ad for an Ikea store in Allentown, Pa.

As Google's vast data farms get smarter, I'm sure they'll start distinguishing sarcasm from the real Allentown. But what about the other side of this story? I'd bet that the vast majority of the millions who use Gmail have no idea about this practice. Most of us focus on two great things: It's free, and you can access your e-mail from any Internet-connected computer on the planet. (I once checked a Hotmail account from a shack on a beach in Phuket, Thailand.)

The fact that Google scans the content of my e-mails, not just to block viruses but to see what's been discussed, is creepy. I realize Google has to make money from advertising to support my "free" service, but reaching into the content of the message feels like a grope.

PC World recently compared the e-mail privacy practices of Google, Yahoo, and Microsoft. Yahoo and Google collect IP address, log-in time, and other user specific information; Microsoft does not. Google, however, asks for the least amount of personal information when a person signs up for the service.

In its privacy policy, Google says no gathered information is shared with advertisers. Google also says machines, not people, scan the messages, but that doesn't make me feel better. People are slow. Machines are very fast. At any rate, Google says it's all a situation fully disclosed to willing customers.

We believe users have the right to choose a free, ad-supported webmail interface to read and send email. We believe that many users will choose the Gmail option, with full knowledge that this free service is supported by targeted advertising, and with confidence that Google is protecting the privacy of all of their email messages.

Critics of Google, who already fret over the company's ability to gather data via its search service, won't use Gmail. PC World columnist Stephen Manes worries about threats to privacy. "I don't want anybody looking over my shoulder as I surf and recording my Web travels on a server somewhere," he says.

A number of technology writers shrug at such concerns. Among them, Charles Bermant in The Seattle Times:

"Free," as we know, is never free. Google supports itself through targeted advertising, part of this includes little links on the side of each message. These links aren't precise; you can discuss a trip to Brittany and receive links to a Britney Spears merchandising site. Even if this is a little creepy at first, you soon get over it.

Technology book publisher Tim O'Reilly gives nine reasons why it's bogus to raise privacy concerns. I find his arguments unconvincing, but he raises an interesting point. He says the big issue is not privacy but whether Google will share the data it has gathered.

The big question to me isn't privacy, or control over software APIs, it's who will own the data. What's critical is that gmail makes a commitment to data migration capabilities, so the service isn't a one way door to the future. I want to be able to switch to alternate providers if the competition makes a better offer. The critical enabler is going to be the ability to extract my data and connections so that I can work with them on multiple devices, for example, syncing my laptop or phone with my gmail account rather than having to work only in a tethered fashion.

Here's a critical analysis of Gmail by the Electronic Privacy Information Center.

I'm curious what Internet-savvy readers, such as those of Crosscut, might think about all this. Do you ever read the fine print when you sign up for a computer service? Let us know. Is it time to get nervous or just enjoy the benefits?