The Electronic Frontier Foundation (EFF) has this to say:
Until now, your Google Web History (your Google searches and sites visited) was cordoned off from Google's other products. This protection was especially important because search data can reveal particularly sensitive information about you, including facts about your location, interests, age, sexual orientation, religion, health concerns, and more. If you want to keep Google from combining your Web History with the data they have gathered about you in their other products, such as YouTube or Google Plus, you may want to remove all items from your Web History and stop your Web History from being recorded in the future.
If you choose to disable Google Web History, here's how:
- Log into your Google account
- Go to http://www.google.com/history
- Tap on Remove all Web History
Once you remove your Google Web History, Google will also stop recording it going forward (unless or until you re-enable it via the same page).
Google has been under increased scrutiny lately when it comes to online user privacy, for the heavy handed way they've used Search and Gmail to push their social networks like Google Buzz and Google+, and more recently for the discovery they've been circumventing Safari's third party cookie protection.