From the article:
Assuming Schmidt uses his company’s services, someone with access to Google’s databases could find out what he writes in his e-mails and to whom he sends them, where he shops online, what’s stored on his PC, or even what restaurants he’s located via online maps. Like so many other Google users, his virtual life has been meticulously recorded.
The fear, of course, is that hackers, zealous government investigators, or even a Google insider who falls short of the company’s ethics standards could abuse that information. Google, some worry, is amassing a tempting record of personal information, and the onus is on the Mountain View, Calif., company to keep that information under wraps.
Danny nails the issues here, for more on this.