How can a .txt file be used as a tracking cookie?

Silent is absolutely right, all cookies are just plain text files. Here's why some of them are called tracking cookies...

Cookies can only be read from your computer by the domain that put them there. So it shouldn't be possible for anyone to follow you around the internet much using them, but it is.

It isn't the websites you visit that write those tracking cookies but the servers the adverts on those sites come from. They record what website you're currently looking at and write a new cookie to your computer. The next website you visit that carries the adverts from the same domain, rereads the cookie, records it's contents and what website you're on now and writes a new cookie.

As there are relatively few ad servers it doesn't take long for them to build up a picture of what sites you like to visit and even what parts of those sites. As a result of what they learn they will alter the content of the adverts they serve you. By personalizing the adverts to you they hope you'll buy more stuff from the advertisers.

It isn't just on the web this is happening. Got a store discount or loyalty card? That's what those are for - to help track what you purchase. Target hit the news last month when they found out a teenage girl was pregnant before her dad did - and just through those cards. http://blogs.ajc.com/momania/2012/02/24/did-target... and lots more at http://www.google.com/search?q=target+can+tell+whe...

You can mod the right browser and nearly eliminate the need to fiddle with these items (prevention, not cure):

FIREFOX: Tools> Options> Privacy> top drop menu set to "Firefox will use custom settings..."> Check 'Accept Cookies from sites'

►Un-Check 'Accept 3rd Party cookies'.

A good collection of effective add-on's (Official Mozilla) is here:

https://addons.mozilla.org/collections/dunbar-papp...

AdBlock Plus (with 'subscription' added) & "Better Privacy" also help defray rubbish.

INTERNET EXPLORER does not handle 3rd party assets very well (or anything else) and won't give nearly the control as Firefox.

It is garbage.

Use to your own demise.

All cookies are plain text files.

The actual file extension is not really relevant.