Privacy

Daniel Docekal, a Czech IT journalist (of sorts), does not like Google. He also does not like Google and DoubleClick deal, ie., the fact that Google both No.2. firm selling banner to complement its business of contextual ads.
He does like it because the deals might allow Google to be able to "identify" us, to say exactly who we are. Sadly, he does not explain why, except for the fact that when more websites are monitored, more is learned. DoubleClick is too small to make a difference, anyway. But there is a more important question (two of them, actually) which DD does not ask.
First question is what the identity is and how it can Google (or Microsoft, - I believe Google more than Microsoft, but substitute for Google name of any larger IT firm in the following text) learn. In the non-IT sense, identity is simple - it's the proof that you are who you are. I have to do this whenever I need from Czech government and it requires my ID, which was issued by government. It has some information about me and my picture. Such identity does not exists online. For some transactions it could be replace by electronic ID (secret key/token, which allows you to sign documents you intend to send to the government who has the public key), but that's not what the Google is after. They want to know "who you are". It means what you like, where (approximately is enough) you live, how much money you have/earn, what makes you spend them (and when). For meta-analysis, it might be useful to know to what kind of advertisement you react or even know that you don't is useful (special price could be offered to you).
The ultimate goal of all this is to offer you a perfect ads (by Google) and make you pay as much as possible (by producers/sellers). Surprisingly (for some), "as much as possible" may be less than the list (usual) price - if you can't or don't want to buy Porsche at current price, maybe 5% discount will make you change your opinion. If this discount is aimed just at you and it is worth doing for the seller, you purchase the car and both sides are happy. Eventually, very well aimed ads could replace general price discrimination tools (like coupons, annual sales etc.), but that's long future.
Right know, Google wants to know as much as possible to serve you the ad you are most likely to click on. In the near future, Google wants to serve you an ad that will make you do something on the advertised sale (register, compare products, buy them...). He does not need to know who you really are to do that. Your name, precise address, your Social Security Number ("Rodne cislo") and plenty of other characteristics are irrelevant. Most of the characteristics are irrelevant for most of the advertisements, at least for now. But even if all these characteristics (all websites you visited, content of all mails you sent) identifies you as a very specific person, is it a bad thing?
That's the second big question. Should you be afraid? Well, some politicians certainly want you to be afraid (so that they can offer you a great solutions if you just vote for them), but you probably should not. But it depends.
If you read all my email, you can probably easily identify me. If you check all websites I visit, you will have harder job, but you still can do it. But what do you actually learn? My name, school, possibly address, occupation, age, financial status... All these things are on my homepage. You don't need to do a sophisticated analysis. This may be atypical, but plenty of people post many things about themselves on Facebook, MySpace, YouTube or their blog. By reading these sources you can learn more than by checking websites I visited last year.
Still, somebody (something) out there can link your online activities with a real person and thus find out it's hobbies. So what?
I can imagine couple of evil uses of this information if it ever reaches Googles hands or G. turns evil. For example, one could tailor spam using this information (spam seemingly coming from a friend from high school would get more attention). One could launch a real-life scam by using this information to choose you. Somebody might store this information and blackmail you with it later.
All this might happen, but it does not really scare me. I expect people that rarely know me to try to scam me and I don't think one should be any more trusting in real life than online. I don't think I can be successfully blackmailed (surely not now). One certainly get's some exposure that moves him from anonymous person to somewhat know person (like not-well-know politician). But your blog or homepage does much more damage. The information that Google has is mostly useless for anything else than the advertising and it is highly guarded secret. Your blog and Facebook page reveals your tastes, hobbies and friends to everybody.