Google does keep cookie- and IP-correlated logs
I asked John Battelle the question about whether Google keeps personally identifiable search log information, particularly search logs correlated with IP address. He asked Google PR, who confirmed that they do.
http://battellemedia.com/archives/002272.php
From my comment there, ultimately, this is bad for users. If the information is kept, it’s available for request, abuse, or theft.
Tags: Google, privacy, logs, retention, tracking, personal data, search