Google has announced in their blog an upcoming change to their privacy policy in the coming months after apparently "talking" with privacy advocates in the U.S. and Europe.  Google will soon anonymize their server logs after 18-24 months unless "legally" obligated not to. 

When you search on Google, we collect information about your search, such as the query itself, IP addresses and cookie details. Previously, we kept this data for as long as it was useful. Today we're pleased to report a change in our privacy policy: Unless we're legally required to retain log data for longer, we will anonymize our server logs after a limited period of time. When we implement this policy change in the coming months, we will continue to keep server log data (so that we can improve Google's services and protect them from security and other abuses)—but will make this data much more anonymous, so that it can no longer be identified with individual users, after 18-24 months.

Read more at the Google blog.