Q:

Google Analytics privacy issue

I have some question about the privacy issues using Google Analytics.
I've heard that Analytics saves the collected IP-adresses indefinitely. Is this true? Is IPs the only thing that is saved indefinitely?
If true, is there anyway to prevent this (from our side, not the users) ?
Can you elaborate about why and your sources.
I have some problems convincing some privacy minded people about using Analytics. Do you have any good arguments why using Analytics, and Google saving all your data, is not that big of a privacy issue?

A:

So, @dan_waterworth is somewhat right, except that there is no evidence that I'm aware of that Google actively links Analytics data and login data. And, to be frank, I'd be surprised if they did, since if they were caught, it would threaten their core profit center: Adwords.
When you make a request to any server, anywhere, that server has an opportunity to permanently store your IP address. The same goes for Google Analytics. They store, but never expose, your IP address, in order to track geographic location for the purposes of exposing that city/country/continent level information in their reporting. They permanently store any information they collect, since that's the whole purpose of an analytics site. So, they store your IP Address, whether you have flash enabled, whether you have Java enabled, your browser version, your operating system version, your screen resolution, and whatever else they can glean from the browser environment. They do not, and cannot, link your visits to one site (foo.com) to visits to another (bar.com), since they use first-party cookies. Further, their individual-level tracking is not really dependable for long run tracking, since cookies expire and are deleted.
However, the German Government (basically) outlawed that level of tracking due to privacy concerns. In response, Google introduced a function called anonymizeIP, invoked as _gat._anonymizeIp();, or _gaq.push(function() { _gat.anonymizeIP(); }); in the async code, which instructs the Google servers to hide the final octet from the IP address before the permanent storage of the record. The drawback is mild inaccuracy of geographic data in your reports. 
Google also offers a permanent, browser-based Google Analytics opt-out, that allows any end-user to disable Google Analytics from tracking them. So, an extremely privacy conscious end-user could just add that plugin, and not have to worry about being tracked by Google.
That said, any website could be storing the same information. Anyone who is so privacy conscious should just stay off the web, as there is no way to guarantee that other sites or mechanisms aren't tracking you. 

