Take for example this article by the ACLU, in particular the Pen register searches applied to the Internet section (http://www.aclu.org/national-security/surveillance-under-usa...). I'm not a lawyer, but given those guidelines the query string variables used by Google seem to be within the purveys of the law. Subsequently they are required to allow the appropriate government agencies to access these requests if they so desire.
In brief, Schmidt's quote is incredibly relevant, because people might be mistaken about what is private under the law. He suggests that people adopt a common sense approach to their activities, especially the ones they consider of a sensitive nature. Instead of suggesting people become familiar with very complex legal documents or adopt a false sense of security. People need to stop thinking that all transactions with web servers are somehow private or privileged, when the government clearly does not want them to be.
I've seen this fifty times now:
"Google says no one can have privacy!" "No, that's not what he said. He said not to use public things if you want to remain private." "Well then Google shouldn't retain user information!" "OK, but what does that have to do with you making misleading comments about what he said?" "-1"
please answer that without making up any quotes.
I am not sure you realize the ramifications of what you are suggesting, or, we simply have differing systems of values.
It is misleading to suggest that Google isn't deliberately retaining information and that it is just trying to comply with the law. The law only states (in some circumstances) that any "retained" information must be provided to the govt