Google knows a lot about you.
If you use Google to search the web, then Google knows what you are looking for.
If you use Google’s GMAIL service, then Google knows who your circle of friends and family are, and the types of things that you email about (based on the Ad Words displayed alongside your messages).
Google owns Doubleclick, a leader in online advertising, so Google knows some of the sites that you are visiting (unless you opt-out of the Doubleclick tracking cookie, of course).
If you are using their new open DNS server 8.8.8.8, then Google can even track where you go on the web, whether you use their search engine or not. (An aside: Web Watch strongly encourages that you do have a secondary DNS server available to you in case your primary DNS server goes down, whether it be Google’s DNS server or someone else’s open DNS.)