Data mining systems like Google Analytics that collect and analyze vast amounts of user data raise privacy concerns that need to be carefully considered when building community and social networking sites. As societal interactions rely on trust or reputation, it's important that this trust can be accumulated and even measured in a safe and secure way. While a user's personally identifiable information should never fall into the hands of third parties, the operators of the site want to be able to target users or groups of users for special offers, enhanced services, etc. and this is the purpose of web analytics software. Nick Arnett recently blogged on Privacy and third-party analytics. He concludes:

So, as long as the site operator is the only one who can connect the user IDs in the analytics system back to an individual’s real identity, I don’t believe there is a privacy violation.

I agree, and note that the user's "real identity" is defined in a social contract between the person, the site and its users. That is, while some sites may require fingerprints and government-issued ID verification, others (most) only care that a unique persona is authenticated by a given set of credentials each time they are presented, allowing users to "take their privacy into their own hands" should they so choose.