This is actually not a policy change, but a long-standing policy which for some reason wasn't enforced on Google Shopper. It has been Google's policy for quite some time not to allow sales of guns or related stuff via Google Checkout (now called Google Wallet -- not to be confused with the Android Google Wallet app).
It sucks, but it's essentially a result of Google being a CA-based company. I don't know the details, but there are some legal implications for CA companies who are "on-line gunsellers". This doesn't affect selling of training classes or similar, or gun-related stuff like targets, etc., just guns, parts and ammo, and it only applies to
selling gun stuff. So Shopper, Wallet, Offers and I'd guess ads as well. It doesn't affect search, or gmail, or anything else.
As for the data-mining, Google provides a comprehensive set of options for opting out of all tracking, and Google
does honor those opt-outs. Google truly does not want to track you if you don't want to be tracked -- but Google believes that it can add enough value to your life by working to anticipate your needs and pro-actively meet them that you'll actually want to be tracked. We'll see how that works out, but web search personalization (adjusting your web search results based on past web searches, Google+ relationships, etc.) has already significantly improved search accuracy for most people, and is a big contributor to why Google search gives you better results than Bing or DuckDuckGo.
Perhaps the best example of what Google intends with this pro-active personalization is the "Google Now" feature of Android 4.1 (Jelly Bean), which was announced day before yesterday: Android uses information from your calendar, web searches, location history, etc. to:
- Figure out where you live and work, and to pro-actively notify you of traffic problems or other delays on your route to work (in the morning) or route home (in the evening). It will also suggest alternative routes based on current traffic conditions.
- Notice when you have appointments on your calendar that indicate you need to be some other place at a given time, and pro-actively notify you when you need to leave. I've actually been alpha-testing this feature for a couple of months and it is awesome. I just make sure that my calendar entries include a location, then 15 minutes before I need to leave my phone lets me know it's time to go. It even works for mass transit, taking into account bus schedules, walking time, etc. (if you put it in transit mode). It doesn't yet offer biking or walking mode, or mixed-mode (I often mix biking and transit), but I'm sure it'll get there.
- Your phone will notify your of changes in the weather forecast.
- If you've searched for a flight, your phone will pro-actively notify you of any changes in that flight status.
- If you've searched for a sports team, your phone will notify you of scores, etc.
There are probably some others that I've forgotten. All of this is configurable, of course, and it's very easy to turn off notifications you don't use, or adjust their priority. And it's also just the beginning. The goal is to provide an intelligent personal assistant that knows what information you need and gives it to you exactly when you need it.
Google's goal with advertising (how Google currently makes 95% of its money) is to make advertising something that's actually useful to people by only providing ads for things that people are actually interested in. If Google shows you an ad that you don't click on, that is considered to be a failure -- you should have been shown an ad that was interesting or else nothing at all. So Google's eventual goal is to dramatically reduce the amount of advertising you see, narrowing it to stuff that you actually want to see.
BUT Google understands that not everyone wants all of that, and that some people will not find enough value in the personalization to justify the loss of privacy, whether or not the loss of privacy has any negative impact (and Google wants to make sure it doesn't, which is why Google does
not sell your data to anyone, because then Google would lose the ability to manage how it's used). So, you can opt out of all tracking, and the most "invasive" tracking options are all opt-in.
Web history (complete history of all web sites you visit) and location history, for example, are opt-in. Unless you've specifically turned them on, Google does not track all of that, even if you're using Chrome. Chrome has an optional feature to enable Google Instant Search from the "omnibox" (the Chrome location bar). If you turn it on, then Google will be informed of each character you type in that box, so that Google can better predict what you're trying to find and get you there faster -- but it's turned OFF by default. So by default if you type something that looks like a URL into Chrome, Google doesn't know about it. You can also configure Chrome to use a different search engine, in which case Google won't know anything about searches you type into the omnibox, either.
You can also opt out of all tracking for either ads or analytics purposes, through Google's privacy tools. Because this opting out is done by installing a cookie in your browser, and cookies can get lost, Google provides extensions/add-ons for Chrome, Firefox and IE that will enforce your opt-outs, re-installing the cookies if they ever get deleted. I know one of the engineers who works on the opt-outs stuff and his team is very serious about enforcing those opt outs and about making sure there's no way any other group at Google can work around them.
There is some stuff you can't really opt out of, of course, except by not using Google's services. You can't avoid seeing ads on Google search results unless you don't use search. You can turn off all personalization of search results, though (but you'll miss out on some
very useful features which are coming down the pipe, I can't say more). You can't avoid seeing ads in Gmail unless you don't use the Gmail web interface. If you use a mail client and get your mail via POP3 or IMAP4, though, you can avoid seeing those ads. Google's position on those things is that those ads, tailored based on your search or your e-mail content, are the price for using the services.
Finally, if you want to see everything Google is tracking about you, you can do that through the privacy dashboard. And you can delete your information from there.
All of the Google privacy tools are available at
http://www.google.com/policies/privacy/tools/. You can also get to that page with two clicks from google.com. Or search for it

Back to the subject of Google and gun stuff... yeah, that sucks, and it's not likely to change unless CA becomes less hoplophobic. By all means let Google know you're annoyed by it, but the policy comes from Google's legal counsel, so it's very unlikely to change. However, it does only affect Shopper, Wallet and Offers.
As far as the rest of the Google-fear goes, I think it's somewhat overblown, that Google is and will be responsible with your data, and that Google provides people with ways to protect themselves from Google even while using Google, which to me shows a high level of respect for users' preferences.
My experience as a Google employee over the last 1.5 years has substantially
raised my previously-high opinion of the company's integrity and commitment to doing the right thing for users. That's not to say there are never any mistakes, such as the Street View wifi packet logging, or the Safari privacy override, but they are viewed by the employees and the management as mistakes to be corrected and avoided in the future. Google really is a different sort of company, and really does try to adhere to "Don't Be Evil". Maybe someday that will change, but it would require a
major culture shift.
Four boxes protect our liberty: soap, ballot, jury and ammo. Use in that order.
Utah CFP Instructor; NRA Certified Instructor for Pistol, Rifle and Self-Defense in the Home; NRA RSO.
I am not a lawyer!