Google Web History: Google and Behavioral Targeting - The Beginning

Google launched a new service called
Google Web History This service will allow users to keep an archive of their web browsing history. The service will also allow integrated web and search history to personalize results based on previous search and viewing patterns.
This service requires a Google account and the Google Toolbar, and users will be able to access their histories from any computer with the service enabled.
As I have been talking about Google and Behavioral Targeting, this is one of the steps towards that goal. Google will track everything you do (of course with your consent) and then in near future will show you targeting ads based on this information.
Side Note: The most interesting thing to watch will be the effect on organic search listings. This is the free source of traffic (sort of free) that a lot of sites have become dependent on but with all the personalization they are bound to get hit.
To ease the privacy, this service is not enabled by default. It also requires PageRank feature in Google Toolbar to be manually enabled. Also, there is an easy way to remove items from you history, however not sure if Google will still keep those in their logs to understand a users behavior.
Giving user an option to opt-in instead of opt-out is the right approach to Personalization and Behavioral Targeting. I believe if you show the users the value and benefits for targeting and let them make the choice then you will create loyal customers and won’t have to deal with privacy backlash.
Stay tuned for more data integration news from Google, this is just the beginning.
I just enabled this services so am going to take it for test drive.