People don't truly care about privacy
There's been a lot of noise about privacy over the last decade, but what most pundits miss is that most people don't care about privacy, not at all.
If they did, they wouldn't have credit cards. Your credit card company knows an insane amount about you.
What people care about is being surprised.
If your credit card company called you up and said, "we've been looking over your records and we see that you've been having an extramarital affair. We'd like to offer you a free coupon for VD testing..." you'd freak out, and for good reason.
If the local authorities start using what's on the corner surveillance cameras to sell you a new kind of commuter token, you'd be a little annoyed at that as well.
So far, government and big companies have gotten away with taking virtually all our privacy away by not surprising most of us, at least not in a vivid way. Libertarians are worried (probably with cause) that once the surprises start happening, it'll be too late.
This leads us to Ask.com's new Eraser service, which promises to not remember stuff about your searching. The problem they face: most people want Google and Yahoo and Amazon to remember their searches, because it leads to better results and (so far) rarely leads to surprises.
The irony is that the people who most want privacy are almost certainly the worst possible customers for a search engine. These are the folks who are unlikely to click on ads and most likely to visit the dark corners of the Net. If I were running a web property, I'd work hard to attract the people who least want privacy and want to share their ideas with everyone else
Make promises, keep them, avoid surprises. That's what most people (and the profitable people) want.