Google can seem a lot like the God of the Book of Common Prayer, unto whom "all hearts are open, all desires known, and from whom no secrets are hid". Like this God, we trust Google not to do evil. We certainly trust that neither God nor Google would tell our secrets to George W Bush. Yet a court case which emerged last week shows just how tempting Google's knowledge about our daily lives is to the US government.

The US Department of Justice requested last August that Google hand over all the searches made through it in one random week. The same demand was apparently made of Google's competitors, who complied without a fight. But Google has resisted the move, and Alberto Gonzales, the US attorney general has now asked the Federal District Court in San Jose, California, to compel Google to comply, bringing the issue into the public eye.

The subpoena comes as part of an effort to rescue the Child Online Protection Act (COPA) – a law which the Supreme Court helped quash two years ago after it was judged contrary to the First Amendment. In mounting a defence against this decision, the government claims that it needs a huge sample of internet searches in order to discover how likely, given current filtering technologies, children are to find pornography online. So it wants a list of a million random web pages, and the records of a whole week's search requests.

Right now Google won't say how many searches are made on it, but it claimed more than 250,000,000 a day in the spring of 2003 and it would be surprising if that figure hadn't doubled since then. The company does everything it can to make its homepage easy to use. It has built toolbars for the big browsers so that searching is hardly even a mouse click away.

Google tracks these searches, following its users around the web using "cookies". Most commercial web sites use "cookies", small files downloaded to a user's computer which make it recognisable to the site. Cookies are how, for example, the online bookstore Amazon is able to greet you by name every time you visit it.

Google's cookie means that the company has a complete, identifiable record of everything your computer asks for online. This can't be tied into your personal information automatically. But if you sign up for another Google service, it can be.

Google now offers far more than a search engine. The most recent addition to Google's raft of free services is "Google Pack", a collection of downloadable software applications for Microsoft Windows which contains plenty of software that could send information about your activities back to Google, although Google Pack's privacy policy clearly states that these features will be defaulted to "off" when the software is downloaded. The Google desktop will index all the documents on your hard disk, and make it instantly possible to find that letter from three years ago that mentioned capsicums. You can make phone calls using Google talk. Then there is Gmail, which will store all your email, well organised and easily searched, making everything about email easy and intuitive … except deleting it.

Most cookies are temporary, but the Google cookie doesn't expire until 2038. This long-term cookie, as noted by Roger Clarke in the recent openDemocracy article "Google: search or destroy", "appears to be associated with all Google Services, and appears to contain an identifier that would therefore enable all visits to any Google site to be correlated". So if Google wanted to, it could tie your email and your chatting into your web searches and your use of maps, dictionaries and calculators, all of which Google also offers.

This is a degree of knowledge about intellectual work and play that the KGB could never dream of. There's little doubt that the Chinese government still aspires to such knowledge and power, and will pressure Google, or Yahoo!, or MSN, to try to get hold of this knowledge, as the case of Chinese journalist Shi Tao, recently sentenced to ten years in jail by the Chinese authorities on the strength of evidence provided by Yahoo!, starkly illustrates.

The information that the US government wants from Google now is not so sensitive. It can't be tied to particular users. Yahoo!, Microsoft and AOL, all seem to have handed it over without a fuss. Presumably what it will be used for is to produce a reasonable estimate of how many pornography sites are indexed by search engines, and what proportion of those sites are scrupulous about excluding minors. Nonetheless, Google has self-interested motives for resisting the demand, and has understood the matter better than its rivals.

The company is really in the media business now, delivering readers to advertisers. What it offers advertisers, uniquely, is extraordinarily detailed, if anonymised, knowledge about the reading preferences of their customers.

Google can guarantee relevance in its ad-targeting because it knows what you're interested in. You tell it with every query and the ads are freshly served up for every question. But the whole system relies on our freely giving Google this information.

Once upon a time, only cranks would have worried about accessing a search engine with connections to the US government - and most of those cranks would have been Americans. Now almost everyone outside the US has come to share the suspicions of the libertarian Right. If Google were to lose the confidence of its users, because we understood how much it knew about us and thought that it might share this with people who have the power to do us harm, it would have lost one of the most important things that makes it profitable. But we, the users, would have lost far more.