What does Google want?

Google is an advertisement company. It's core business is structured around making a simple promise to it's customers (that's not you, by the way):

"Advertise with us, we are more effective than traditional media because we know your target market".

Traditional media (TV, radio, newspaper, flyers, etc.) only knows how to reach an audience but has no means of delivering ads that are based on personal interests. For advertisers that means spending a lot of money on getting in contact with people that will simply never buy their product. For example, a company that sells make-up and spends 1000$ on an ad campaign in a daily newspaper will burn 500$ straight away as men are unlikely to be interested.

With Google, advertisement is different. Google provides advertisers with fine control over specifying who will see their ad. The company from the example above may order their ads to be only shown to women age 18-40, with an income that allows for buying vanity items and that also live in the vicinity of an outlet store. In other words: only to people which are likely to become customers.

Naturally, complying with a request like the one above requires actually knowing personal details of potential customers and that is exactly what Google wants: as much personal detail on as many people as possible for the purpose of matching buyers and sellers.

What's the harm?

There is probably little to say about selling lipstick and mascara to adult women, however, Google's matchmaker algorithm is automated and also allows advertisers to target children, the elderly, the desperate and in general people without the capacity of fully comprehending the products and services that are offered.
This is where targeted advertisement becomes dangerous and immoral: it allows for exploiting people's fears and weaknesses to coerce them into deals that are not in their best interest.

There is also the very serious concern of Google's database of personal profiles falling into the wrong hands.