Given that much of Google's growth was shepherded by Eric Schmidt, who seems to think privacy is orthogonal to evilness, I think you've hit the nail on the head.
You mean the guy saying in a television interview that Google is subject to the patriot act and if you really don't want anyone to know about something, you shouldn't be telling google?
In the same way reporters are always on the lookout for political gaffes instead of substance from our candidates because that's what viewers watch, statements like this are really just calls for more marketing and fewer frank answers.
Eric Schmidt is the kind of guy that says exactly what he's thinking, because he doesn't think you want to be lied to. This results in a lot of quotable quotes that people overreact to, but you have to moderate the quotes with actions.
A good example is the Target profiling that was on HN yesterday. Google collects your personal information to target ads to you, but they don't hide that fact. They run ads on TV and in the subway to tell you what they do, why, and how it affects you. They let you opt out of targeting. They rewrite their privacy policy to be as readable as possible. They change their privacy policy and notify you, logged in or not, on all their sites. Basically, Google wants you to use information to make an informed decision about whether or not you want to give Google your data. Compare this to Target, where they deliberately hide their targeted ads so you don't realize you're being targeted.
In the end, both Google and Target do the same thing: profile you to make advertising dollars more effective. Google tells you what they do and why. Target lies to you so you don't know you're being profiled. And then people get outraged at Google for becoming evil, even though they're the only ones that don't lie to you!
He didn't say you shouldn't tell Google, he said you shouldn't do it. He doesn't support behavior which relies on privacy—i.e., anything controversial which lacks near-universal support from society.
That's the part that's usually quoted. You'll have to be more specific by what you mean by "He doesn't support behavior which relies on privacy", because that sounds more like a cartoon villain.
The full quote is
Q: People are treating Google like their most trusted friend. Should they be?
A: I think judgement matters. If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place. But if you really need that kind of privacy, the reality is that search engines including Google do retain this information for some time, and it’s important, for example that we are all subject in the United States to the Patriot Act. It is possible that that information could be made available to the authorities.
"He didn't say you shouldn't tell Google, he said you shouldn't do it."
Like, you should quit being gay, or a woman in a tech forum, or a person of color, or a jew, or having leftist opinions while working for a conservative boss, or vice-versa after you changed jobs, and quit having an address your abusive ex can discover, and quit secretly liking Lady Gaga.
It's very unlikely that a court would want any of that information and sign a warrant for it, so you don't have to worry about how Google protects your information from court orders. If you boss writes Google and asks whether or not you're gay, that request is most likely going to be routed to /dev/null. If your boss gets a warrant and a judge signs it, then that's another story. Google has to comply with the law, after all. So does Apple, Microsoft, and every other company in the world.
As for protecting your information from your friends, I think Google does a pretty good job in the situations you mention. Google doesn't share your search history with anyone. You don't have to pick a gender to use Google+. You don't have to list your race, ethnicity, or religion. And, Google+ provides a number of privacy controls so you don't inadvertently share your leftist feelings with your conservative boss.
The absolute safest way to protect information is to not disclose it to anyone. That's all Schmidt is saying. If you're planning to overthrow the government, don't post your plans to Google Docs. If you're just worried that your boss won't like you, though, then you can be a little more relaxed, and share things via Google+ with close and trusted friends. Then, the main attack vector is no longer through Google; the risk is that your friends will re-share something (offline or otherwise) that you didn't want them to. And that's just life as usual.
The fact that this comment has been downvoted is as hilarious as it is depressing. Are we not even going to pretend any more that on HN downvotes are for bad comments, not comments we don't entirely agree with?
I think it's reasonable that people could see this as a bad comment.
The whole point is that no-one should be able to say "this is important that it stays private, this isn't important".
For one thing it's none of their business, for another historically the most unusual things have been used for discrimination or oppression. What may be seen as acceptable today may not be so tomorrow. What may be the folly of youth now may be seen as a clear lack of judgement tomorrow.
