"By April next year, Yahoo! will have encryption in place to protect information shared by users of its online properties as well as information exchanged between the Internet firm's data centres," Mayer said in a blog post.
Google has already begun scrambling most of the traffic at its websites as technology firms grapple with moves by US intelligence agencies to spy on what people are doing and sharing online.
"As you know, there have been a number of reports over the last six months about the US government secretly accessing user data without the knowledge of technology companies, including Yahoo," Mayer said.
"We will continue to evaluate how we can protect our users' privacy and their data," she added.
Mayer said that a more sophisticated encryption system will be in place at Yahoo's free Web mail service by January to protect user privacy.
Meanwhile, a freshly-filed lawsuit in California accuses Yahoo! of violating privacy by scanning Yahoo Mail messages for information to better target advertising.
The suit seeks class action status and asks that Yahoo! be ordered to pay US$5,000 per user, or treble that amount as permitted by civil law. Yahoo Mail reportedly has about 275m users, according to the legal filing.
"Because Yahoo's revenue model is so fundamentally dependent on advertising and because it can increase revenues by building more accurate dossiers, it is strongly incentivised to gather as much personal information on users no matter how sensitive - or illegal," the lawsuit claimed.
The lawsuit alleges that Yahoo! scans incoming email messages regardless which service senders use. The lawsuit was filed on 15 November in the federal court in the Silicon Valley city of San Jose on behalf of a California man.
Yahoo!, Google, Microsoft and other Internet companies have vehemently denied letting US spy agencies tap directly into their data, maintaining that they have only provided information when a request is backed by court-sanctioned orders.
America's ultra-secret National Security Agency reluctantly finds itself in the headlines amid a wave of disclosures from ex-intelligence contractor Edward Snowden, who has exposed the service's vast electronic spying operation.
The agency uses super computers, linguists and code-breaking mathematicians to oversee what experts say is the world's most powerful digital espionage organisation.
Source: AFP via I-Net Bridge
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