It’s not news that Google knows more about you than your parents do (or your wife, husband, girlfriend, boyfriend etc etc). We know that and, to a certain extent, sign off on allowing it to happen.
The Wall Street Journal did an interesting piece looking at Google, privacy and the extent of their knowledge (as well as other entities like Facebook). I suggest you read it for the details. The following image gives some insight into just how much Google has on one WSJ reporter.
This quote from the WSJ article really sums it all up though.