With tools like Google Toolbar, Google Analytics, Web Accelerator, Adsense and Adwords, Google has a variety of means of collecting information about where users browse (with Toolbar & Accelerator, they can track your browsing off of Google properties as well). The ability to collect this personal information is vital to Google’s business model, evident by their willingness to pay Dell $1 billion to pre-install Google Toolbar on all their machines.
Now it seems that the vast amount of personal browsing habits Google has accumulated might be put to use. This thread at Webmaster World speculates that Google has tweaked their search algorithms to place more importance on traffic patterns over inbound links. While not verified, it supports the argument that Google is releasing many of these tools in order to collect user data, not necessarily to help you save 7 seconds a day in web browsing.
[via Search Engine Journal]
MichaelZimmer.org 
Indeed, very interesting… To include traffic in the algorithms seems to be an effective way of improving searching. Do you see any changes in regards to user privacy? I guess it is in accordance with their privacy policy (http://www.google.com/privacy.html), but does traffic-based searching algorithms perhaps alter the information connections and flows somehow?
Adding one’s particular location at a particular time to the other personal information in Google’s databases raises the stakes when considering the ability for government or other third parties to gain access to this aggregated data. By requiring a login to access the wi-fi system, another piece of potentially-identifiable information is now flowing out of my control..