Logs are kept while using Google. For every search you do, logs track line by line what the topic was and what links you then clicked on, the time and date of the search, and the location of the computer search. This is in part a key to the success of their search engine algorithm. It is also used for fine tuning their marketing. The information gathered from the logs, along with a Google cookie, help to place ads relevant to you on websites that have partnered with Google.
This type of remarketing is called web tracking, and it is a little-known but widely used practice, not just by Google but tracking firms and other online stores. What's frightening about Google, however, is that because they offer the most services, they are the most pervasive company and therefore have the most information on its users.
Some of the search services include Google Desktop (searches your hard drive for information), Google Maps, and Google Toolbar (can potentially track every site you visit, not just your searches). These three services alone can access all of the information on your computer, every location you've ever searched for, and every site you visited. Again, all this is possible through only three of their services.
Google privacy settings and other privacy settings are a feature which an alarming amount of users are unaware of. These allow you to delete not only your web search history but all of the images, news, products, video, maps, blogs and books that you have ever searched for. Google obviously profits more off of having your information, rather than promoting their privacy settings, so it's no wonder that each service has its own privacy setting procedures, or what seems like a million different places to go to change them, and where these settings are located are subtle to say the least. For your own safety, take the time to locate and check your google privacy settings and all other privacy settings available.
23,000+ Google Employees potentially have access to your information. Not that all of these people have regular access or even permission to see your information, but this number is staggering and scary, especially considering the recent news stories of Google employees being fired for breaching Google's user privacy. If a person can see and use this information, not only is our Internet privacy seriously compromised, but so is our identity.
Hacking is a serious worry because there is no server that is hack-safe. So, just as Google is telling you not to worry because they never share your information, a hacker could steal this information, and use it for reasons other than simple marketing purposes.