"Well yes, there are operating costs, and if we think we can use these utilities for "free," I don't know why we shouldn't expect them to gather our info and advertise at us."
Why of course, but how many people really think about it like that? If I go and buy a watch the value of that transaction is clear - I'll give you some money and you give me a watch. When it comes to 'free' services then it starts to get murkier. I'll give you a watch for free but it tracks your movements and then sells that data. Now does it get advertised as a free watch with some small print to read or not?
So we have services that are free but have add-ons for premium services (say Skype or some online games) services that are currently free until they work out how to make money out of you (say Viber) and services that are always free but use the data about you (this is where google and Facebook come in).
"I'm MORE concerned about google, since the results they feed back to you are tailored to your profile and past search habits, and you have to log in now to get your search preferences, ..."
I'm more worried by Facebook as they have more personal data and they have a pressing need to generate more dollars per-customer if they want to look to the stock market to raise more cash - and you guessed it, what they can sell is your data. In addition they seem immune to any bad publicity surrounding the privacy they provide. Indeed they go out of their way to remove your privacy and have to be forced to do anything that enhances it. I suppose the reality of thought is why bother with privacy as it reduces the amount of money we can make and are customers just keep giving us more and more data regardless.
So then what about google, for me the biggest worry is that they're trying to make google and its products your portal to the internet - so we have search, maps, the cloud, You Tube, usenet groups etc. What they want is for you to access the internet with google as its starting point and then they can track whatever you do.
Edit: The other aspect I always have a problem with is the vast aggregation of personal data being performed by private companies. Aggregation of data is one of the worse things you can do in terms of security - it's bad enough the amount of data the government holds (and frequently manages to lose) on people but it surely can't be right that google holds even more?