Google launches "My Search History" today, at tool that tracks all your searches. While some people cite privacy concerns, there could be advantages other than displaying customized advertising:

While you can also maintain a local history of searches, the centralized version gives the search the possibility to customize the results according to your anticipated needs.

Let's take an example - let's say a search for "xxx'". Joe searches for this term, and so does Martin, but both of them actually have different goals. Joe is really looking for information on porn, while Martin is interested in XXX, the movie (ed. I know this isn't that great of an example, I will update once I come up with a better one).

So if the search engine actually knows that Joe is searching for porn a lot, while Martin is very interested in movies, the search engine also knows how to customize the results. And yes, it also knows how to best customize the advertising ;-)

So as you see this would probably work the best for people who do more generic searches. And I would imagine that a lot of people use those; however I am not sure that those people would be aware of this new feature.

While I normally trim down my search results by making them more specific, I think that a lot of users rely on relatively generic terms and then actually don't mind browsing through a couple of pages in order to find the desired result. I would actually like some statistics on this, anyone?

Don't get me wrong, I do share the privacy concerns and what actually is done with the data, but I doubt that better matching of ads is the sole motivation here.