How does Google handles privacy issues?

Google claims to be very secure about privacy issues, but there are a lot of people very sceptic about this. On the website of Google there is a Privacy Statement which explains exactly which information is collected and saved by Google. The information they collect is offered to advertisement companies, partners, sponsors, etc. According to Google this information is only basic and not related to personal information of the user. This is the part were sceptic persons come in. The online mail service that Google offers collects information directly from the mails that the user sends and receives. This information is used to adjust the advertisements the user sees. Google claims that everything goes automatic by using keyword software, but the information of the user is stored on one of the many servers. This is the part the sceptics are worried about, Google having access to a lot of personal information of their users.