Of course, Google records everything you do with its services from searches and locations (Google Maps) to the videos you watch (YouTube) and it even reads your email (Gmail). It uses this information to "customize" your searches and the ads you see. You can see what the search and browsing history Google has stored on you at history.google.com. Click here to learn how you can wipe the information Google records and stop it from recording your information in the future.
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