To rephrase the question, spy on you with their Google Analytics? Do they take that information and then possibly use it against you?

I think this idea comes from the conspiracy theory would have you believe Google is evil. Of course, it is true that Google currently dominates many utilities on the web: e-mail, Analytics and other Google Apps.

However, Matt Cutts, an engineer from Google Web Spam team, officially declared that his team does not have access to Google Analytics and Google Analytics team has no access to their information. So they do not use Google Analytics against anyone.

When all is said and done, I can not worry about it. We use Google Analytics on all of our primary sites of money - their tools are so valuable and better than most pay. Just be sure not to use sneaky redirects, cloaking, or aggressive blackhat stuff on these sites.

To use the Google tools, make your site as good as you can follow all the guidelines that Google offers.

And here's the philosophy we live in, do not worry about what others are doing. Focus on what you're doing, and that includes not worrying about Google.