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How much of your information is shared online? Photo courtesy of Flickr user Ed Yourdon.

Last week your world got more connected. Not that you had anything to do with it. This was Google’s play and as with all things Google, its impact is both potentially huge and shrouded in digital mystery.

On March 1, Google rolled out a new policy in which it will start weaving together all the data it gathers about our online behavior on its various properties. So what it learns about our preferences on Google Search will be combined with what it gleans from what we watch on YouTube and how we use GMail and Android smart phones and Google Maps. Add to that all the personal stuff that users of Google+ share and you have one deep gold mine of data.

Fret not, say the folks at Google. They’ve been collecting this all along; now they’re just pulling all the pieces together to make them smarter about what we like. And that, they insist, will help them help us.

Before you start wondering what we’ve done to deserve such thoughtfulness, consider the other side of this coin. All that data that helps Google help us is exactly what online advertisers crave. The more they know about us, the better they can anticipate our wants and needs, the more responsive we’re likely to be to their pitches. A few years ago, Google didn’t need all this to make a fortune in ad revenue. It became the beast of Internet advertising by selling relevance to search results.

But then Facebook changed everything.

Thanks for sharing

All that sharing of photos and links and most of all, “Likes” has accelerated the swing to a new era of advertising, one based on the accumulation of an enormous amount of data on how we behave when we’re online. Back in the old days, you might have noticed an ad in a magazine, but no one–not the magazine, not the advertiser–could know that for sure and they certainly didn’t know what you did afterwards even if you did see it. Did you mention their product to friends? Did you do a little research about it? Or did you never think about it again?

But a lot of the above is now played out on Facebook or other social networks. And what isn’t is easily trackable. Alexis Madrigal, writing for The Atlantic website last week, provides a sobering look at what’s happening in the world of tracking codes, pixel trackers and cookies. Using a new tool called Collusion (more on that in a bit), he was able to find out that data from a single visit to a website was sent to 10 different companies, not surprisingly Google and Microsoft but also “a gaggle of traffic-logging sites, and other smaller ad firms.”

Madrigal points out that no names are attached to the data, but it’s not truly anonymous because a digital identity with a number is created and refined so that you can be targeted with ads most likely to evoke a response. He also explains that the tracking is done by machines not yet smart enough to figure out who you are. But how long will that be the case?

All of this can seem a bit creepy, even if there’s no indication that companies are doing anything unseemly. They’re simply trying to use the latest technology to get an edge in a medium in which, let’s face it, ads have often been viewed as rude and obnoxious intruders. But we’re in uncharted territory here, where, as Madrigal puts it: “Companies’ ability to track people online has significantly outpaced the cultural norms and expectations of privacy.”

The web inside the Web

Which brings us back to Collusion. It was unveiled last week by Mozilla as a free add-on on the Firefox Web browser, which, not so coincidentally, is being challenged by Google’s browser, Chrome. Mozilla CEO Gary Kovacs boasts that Collusion allows us to “pull back the curtain” to see which advertisers and other third-party sites are tracking us.

Eventually, says Kovacs, the tool will allow people to opt in to share their web-tracker data in a global database, with the purpose of helping researchers and privacy investigators get a handle on what’s going on in the web hidden inside the Web.

Collusion can’t stop the tracking; it can only show you how it’s being done. Last month, however, a coalition of Internet companies, including Google, relented to White House pressure, and agreed that by the end of the year, they will offer a “Do Not Track” option. It will allow you to stop advertisers from serving you targeted ads based on tracking data. But they would be able to continue gathering data for “market research” and “product development.”

Still feels a little creepy, doesn’t it?

Target on target

In case you missed it, The New York Times Magazine ran a fascinating piece a few weeks ago by Charles Duhigg, author of the new book, “The Power of Habit: Why We Do What We Do in Life and Business.” It focused on how Target combined algorithms and extensive analysis of buying habits to predict when women were pregnant and the techniques it used to market baby products to them without revealing what it knew.

More creepiness, but definitely worth a read.

Video bonus: Here’s a little demo of how Collusion shows you how the web of watchers grows as you move from site to site.