This is an interesting development, though some think it is too late and doesn't go far enough:
Official Google Blog: Taking steps to further improve our privacy practices
3/14/2007 03:00:00 PM
Posted by Peter Fleischer, Privacy Counsel-Europe, and Nicole Wong, Deputy General Counsel
Just as we continuously work to improve our products, we also work toward having the best privacy practices for our users. This includes designing privacy protections into our products (like Google Talk's “off the record” feature or Google Desktop’s “pause” and “lock search” controls). This also means providing clear, easy to understand privacy policies that help you make informed decisions about using our services.
After talking with leading privacy stakeholders in Europe and the U.S., we're pleased to be taking this important step toward protecting your privacy. By anonymizing our server logs after 18-24 months, we think we’re striking the right balance between two goals: continuing to improve Google’s services for you, while providing more transparency and certainty about our retention practices. In the future, it's possible that data retention laws will obligate us to retain logs for longer periods. Of course, you can always choose to have us retain this data for more personalized services like Search History. But that's up to you.
Our engineers are already busy working out the technical details, and we hope to implement this new data policy over the coming months (and within a year's time). We’ll communicate more as we work out these details, but for now, we wanted you to know that we’re working on this additional step to strengthen your privacy.
If you want to know more, read the log retention FAQ (PDF).
There's more here: WIRED Blogs: 27B Stroke 6: Google To Anonymize Data -- Updated. And here: Google adopts tougher privacy measures.
Thanks to Boing Boing for the tipoff.