Yahoo! Inc, has shut down all of its user-created chat rooms this week after advertisers complained their online ads were running alongside discussions of sex with children.

PepsiCo Inc., State Farm Mutual Automobile Insurance Co. and Georgia-Pacific Co. had ads appearing in Yahoo! chat rooms suggesting pedophilia. The three companies pulled their ads from Yahoo! chat rooms after a Houston TV news channel broke the story.

The Los Angeles Times reported that Georgia-Pacific, makers of Dixie products and Brawny paper towels, has pulled all of its ads on Yahoo! and hasn't returned to the portal.

"The announcement that Yahoo! closed down hundreds of user-created chat rooms did not come as a surprise to us. Many major advertisers are increasingly concerned about their brands being associated with objectionable content. They often have little or no control over where the ads end up being displayed, especially on an advertising network," says Allan Kaplan, CEO, I/PRO.

"We are working on improving the service and enhance the user experience. The ability to create user chat rooms is currently unavailable and Yahoo! has not announced any plans to when they will be available. We want to concentrate on working with our advertisers to make sure that their business will be served in the best way," says Mary Osako, spokesperson, Yahoo!