Yahoo has significantly cut the length of time they keep personal data on file -- they have agreed to scrub all their data (remove all identifiable user information) within 90 days of its collection. This comes directly after Microsoft's offer to keep this data for only 6 months if both Yahoo and Google promised to do the same.
Google currently only scrubs their data after 9 months -- something that Microsoft and Yahoo have likely identified as a crack they may be able to squeeze into. The problem for Microsoft and Yahoo is that Google probably doesn't need to listen to Microsoft's proposal, as the majority of Google users simply don't have a problem with their data retention policy. Be it wise or not, this is one of those issues that only a handful of people (relatively speaking) actually care about.
If Google does anything, they should give their users the ability to see exactly what information they know about you, and an easy way to delete all or portions of it. Users should also have the ability to set their own data retention limit to appease even the the most concerned users.
What do you think Google should do? Should they take Microsoft's offer, and agree to scrub their data after only 6 months instead of 9?