Google watches everyone who uses their search engine! Not everyone in the world just like yahoo do and other search engines. Its to provide us with more accurate results!
They take big responsibility on them (search engine companies). If they fail keeping "the secrets" they can loose everything.
Retailers also keep records on what products people buy and dont buy. This is normal with most any business,
I read something about this on a blog a few weeks ago. It was pretty funny. They also watch what you read, look in your windows, and know where you are.
yeah google is watching us. Imagine the power they have with all our search info! They know what the world is searching for lol.