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The Ugliness of Privacy Notices
As I'm sure you fully understand, privacy advocates aren't concerned about only their own privacy, but of those who don't know enough to use a (non-simple) technology like Tor.
And if you read the actual letter from these "chicken littles", you'll see their concerns center on "how to ensure that Google Flu Trends and similar techniques will only produce aggregate data and will not open the door to user-specific investigations, which could be compelled, even over Google’s objection, by court order or Presidential authority." What is so irrational about that?
People who are risk averse with respect to privacy can always use Scroogle or Tor or Anonymizer, as Adam points out. Or they can use one of the many other search engines out there.
It's true that some people might not fully appreciate the privacy risks accompanying the use of Google products, but it hardly makes sense to neuter a technology simply because some users might use it unwisely. The solution is to educate users. By now, it should be common knowledge that when you submit sensitive information to a third party, there is inevitably some risk of that information being misused. But with strong privacy policies, the risk of abuse is low. The best way to minimize the risk of privacy invasion is not to ban promising technologies but to limit the ability of government to compel private data from firms unless absolutely necessary for civil or criminal proceedings.
Just wondering what kind of connections there may be between user identification and g-mail by google.