Besides of providing personal user experience, the hidden reasons (from my point of view and others) are to simply know the users better and to use it to improve Google’s products based on this private data and additionally for better ad-targeting, which basically means more revenue.
It is important to mention that Google isn’t the first company doing so. Microsoft, that jumped on this opportunity to trash Google, is already doing it for years. Here’s what it says in Microsoft’s Privacy Statement:
“The information we collect from you will be used by Microsoft and its controlled subsidiaries and affiliates to enable the features you are using and provide the service(s) or carry out the transaction(s) you have requested or authorized. It may also be used to analyze and improve Microsoft products and services.”
So don’t think it is the first time the users private information is exposed in such manner. But with all due respect to Microsoft, Google’s web properties have a much greater hold over the virtual world and even if Microsoft is doing it, it doesn’t make it right for Google.
I don’t know if any of these investigations will actually change anything eventually (as I stated, it isn’t the first time it is happening) but if you don’t want to share your private information with Google, you can control and opt-out what to share in Google’s privacy tools page.