It's no secret that Google is a good note taker. Every search you've ever done, from "Justin Timberlake is a jerk" to "Katy Perry's boobs," is sitting on a server somewhere, right now.
Before you start to worry about whatever nefarious purpose Google is using this information for, relax. Google is a notoriously difficult customer when the government comes calling. They'll typically only lend a hand when search results can help solve a specific crime, not when the CIA wants to know what porn you're into. Google also goes out of their way to work for transparency, both in their own practices and in the government's. No, Google is not trying to monitor your searches in an effort to hatch some nefarious scheme.
At least, I don't think they are … they do own their own satellite, though, so ...
The real reason they're collecting all this data is to help sell you more stuff, plain and simple. It's true that Google probably knows more about you than your closest friend, but it's also true that they only do it to build a better commercial.
And with all that data at their fingertips, Google can do some pretty neat stuff. Take for instance one of their newest undercover features, Top Charts, a bunch of lists covering everything from animals to whiskey. Updated regularly, these lists catalogue and weigh your searches (and everyone else's) and then organize them into lists ranked by popularity.
It's like digital middle school.
So, without further ado ...