Google really wants your logs
I wrote here about some of the privacy implications of Google’s data retention policies:
http://www.aquick.org/blog/2005/05/05/google-wants-your-logs/
With the launch of Google Analytics, Google is now poised to collect that data not only from every Google visit, and every site that has Google ads on them, but also every site processed by Google for “analytical” purposes (although there’s probably a fair amount of overlap between the latter two).
http://www.google.com/analytics/
Remember – Google does not consider your IP address to be personal information, and so it’s exempt from most of the normal restrictions on how they use the data they collect. The terms of service for Google Analytics suspiciously do not mention whether Google is allowed to utilize any of the data they collect on your behalf. One must conclude that they therefore assume that they are, and consequently that they do. It’s unclear, but it’s probably the case that Google could, according to the terms of these agreements, correlate search terms from your IP address with hits on other websites. I don’t see anything in there preventing them from doing so, because the two pieces of correlated data are obtained by different means.