If you have Google Docs, Adsense, Analytics, Reader, GMail or even Google+ then it’s all being combined into a single login system with a single set of terms and conditions. As I see it, their FAQ states the obvious contradiction:
“Is Google collecting more information about me?” ‘No, Google is not collecting more data about you…’
“What should I expect to see change as a result of this?” ‘Over time you can expect to see better search results, ads and other content…’
Purely by correlating information posted on each individual service, now that they have your formal permission to do so.
Should you be worried about this? If I’m right - it’s no different to what they’re already doing in the background. If you’re not currently worried and carry on and enjoy yourself! If not, cancel your accounts and go elsewhere. I won’t be.
Google just want to legitimise they already do. Good for them.