How Google remembers your preferences
When you set preferences in Google, the site is customized for you every time you visit it, as long as you’re using the same computer through which you set the preferences. To provide this convenience, Google must place a cookie (a small information file) in your computer. The site and the cookie high-five each other whenever you visit Google, and then the site appears according to your settings. For this system to work, the reception of cookies must be turned on in your browser.
Some people are militantly anti-cookie, claiming that the data files represent an invasion of computer privacy. Indeed, some sites plant cookies that track your Internet movements and identify you to advertisers. The truth is, Google’s cookie is fairly aggressive. It gets planted when you first visit the site, whether or not you visit the Preferences page. Once planted, the Google cookie records your clicks in Google and builds a database of visitor behavior in its search results pages. For example, Google knows how often users click the first search result and to what extent they explore results lower on the page. Google uses this information to evaluate the effectiveness of its service and to improve it.
As to privacy, Google does indeed share aggregate information with advertisers and various third parties and even publicizes knowledge about how the service is used by its millions of visitors. The key word is aggregate. Google’s privacy policy states that individual information is never divulged except by proper legal procedure, such as a warrant or a subpoena, or by individual consent. The privacy policy is published on this page: www.google.com/privacy.html
I have no problem with the Google cookie or with cookies in general. The convenience is helpful, and I don’t mind adding to the aggregate information. It’s rather comforting being a data droplet in Google’s information tsunami.