I agree with you completely with regards to privacy and all the information that Google has about users. However, the difference is that Microsoft of yesterday had a stranglehold on users' choice. It was really hard to be productive by NOT using windows operating system and the whole ecosystem that came with it.
Today you don't want Google search? Use Bing or ddg. Gmail? There are countless other free webmail providers. Google+? You have Facebook, Twitter and so on. Youtube? DailyMotion, Metacafe, etc. Android phones? You have iOS, WP8 devices.
While Google really is very powerful, one still has good alternatives.
I actually think Yahoo could be a bit of a dark horse here, but it's hard to guess where Marissa Mayer's head is at in this regard. Yahoo have actually done some cool stuff, in terms of Open Standards and Open Source. They were early with embracing RDFa and Microformats, for example, and some cool OSS code has come from Yahoo, including, IIRC, Hadoop. But obviously a lot has changed at Yahoo since then, so I dunno what to think about them right now.
That's a childish opinion. A grown up would see how Microsoft is constantly threatening with a nuclear patents war, sliding in that pool of companies that can't innovate any more and so they turn to litigation.
If anything I'm seeing signals that Microsoft is turning into a patents troll.
The wishful thinking on Microsoft turning into a beam of openness would be laughable, if it wouldn't highlight the tragedy of human nature (we are so stupid sometimes).
I came of age as an active Slashdot reader. At that time Microsoft was seen as an arch villain that could do nothing but evil. Curiously, today Google has a far deeper and more chilling degree of influence far beyond what Microsoft had. Microsoft had a monopoly on an open platform, Google knows everything public about you, a lot of private stuff too, possibly can run facial recognition of you against every picture on the internet, and wants to also be able to predict what you are about to do. And they have a monopoly on online advertising. Unelected regulators and elected representatives are terrified of Google. Google has gotten a blank slate pretty much to do what they want, perhaps from a national security standpoint alone.
Google today, makes the Microsoft of yesterday look like a used child's toy.
I see the attitude toward any dominant government or corporation as a pretty good thermostat toward a group's value of freedom and openness, and quite frankly the free pass Google gets here (relative to Microsoft in 1998) is disturbing.