Wow, you're really going to still quote that out of context. Literally the next sentence out of his mouth was a warning that Google is subject to the PATRIOT Act and you should be careful what you use it for:
"But if you really need that kind of privacy, the reality is that search engines, including Google, do retain this information for some time. And it’s important, for example, that we are all subject in the United States to the Patriot Act. It is possible that that information could be made available to the authorities."
What context is added to his original statement by the subsequent sentence that changes its meaning? If anything, it strengthens his point by mentioning that Google retains the information, and that one example of its use is that authorities could request it.
"But if you really need that kind of privacy, the reality is that search engines, including Google, do retain this information for some time. And it’s important, for example, that we are all subject in the United States to the Patriot Act. It is possible that that information could be made available to the authorities."