I have been reading some articles about how much personal information Google collects, and how few safeguards there are against abusing this information. The whole article can be found at CNN. Effectively, between Gmail, logging searches, its IM client, and all of the various services Google provides, they could, in theory, create a complete profile of many people. There is no evidence that they have done this, but it does seem clear that they have the data to do so.
Don't worry, though, Google's motto is "Don't be evil," and according to the CNN article linked above, Google "only shares personal data with outsiders in certain cases -- such as when a user agrees, or to comply with the law, detect fraud, or have data processed." They really do have a good track record for not abusing their power, but I am wondering if that power is too much for any company, no matter how well run, to resist indefinitely.
I am not advocating any government intervention nor that you stop using Google's services. I use Gmail and I use Google for most of my searches as well as many of their other services (the irony of blogging this on a site owned by Google is not lost on me). I do think that you need to be aware that Google does keep track of virtually everything that their services are used for - even if they do no more than store the data, it is still there.
How great of a privacy concern is Google's data? Right now, not much of one. However, Google's data does have the potential to be used and abused to an extent unrivaled by any private organization in history - and rarely surpassed by governments. So, basically, be careful when you use the internet. Google is watching.