Artwork by psd.
What this means in practice is that your behavior across Search, Maps, YouTube, etc, will be combined to provide a better product and, more importantly, serve you better ads. Google is actually more transparent than Facebook in this regard, but it still gets more blowback.
Honestly, Google is like the nerd who helps you with your homework whereas Facebook is a friend. People voluntarily tell Facebook everything, but Google has to sit on the sidelines, just listening. Even if Google is better (or equally) well-intentioned, it still comes off as creepy.