Yes, they probably save it somewhere just like all other big sites out there. But the main problem in my country is that ISP and Goverment watch everyone. So who cares if a website is watching you when the goverment is watching you on all other websites aswell. Google only look at what you search and show it in their keyword tool for adwords. That's pretty much it. I don't think it's a CIA project because of the look of their office. It's like a fun place to work at and CIA is not
It is to an extent if you value your privacy Im sure its more then what you think and its only going to get smarter as the years go on... kinda scary if you think about it for a little while Evidently by the pole results here most webmasters feel a sense of distrust or distaste.. thx M1
Google watches your online activity very closely (you can term it as spying!) simply to make your search more meaningful and exhaustive (in google's words...). Go with google if you like it; otherwise, opt out
Google are constantly gather details on what you do so they can enhance their search engine with the information. No big deal in my opinion!
If you have google toolbar installed google will track otherwise no. When installing toolbar you can read the Terms and Conditions