There is no real option to opt out, except not to use Google's products. You could sign out of the Google service that you use each time before you search using Google, for instance. Google Books, Google Wallet and Chrome are not included in the new data-sharing move, and will maintain their own privacy policies.
"In short, we’ll treat you as a single user across all our products," Alma Whitten, the director of privacy, product and engineering at Google posted on the Official Google Blog.
Information collected by Google can include personal data such as photos, posts, and contact details, as well as activity such as your viewing habits on YouTube. The Google Policies and Principles page describes the privacy update as a move that tailors your search results based on information gathered from your activity on other Google products.
“Google claims this move will make life easier for consumers,” said Ioana Rusu, Regulatory counsel for Consumers Union, the advocacy arm of Consumer Reports. “But in truth, it will allow Google to better target you with ads tailored to your perceived preferences and interests. Detailed data about your activities across Google’s numerous sites and services represents an advertising gold mine and allows Google to personalize content you see based on your Gmail conversations or your YouTube views."
The move to merge user data across Google services will combine the company's more than 70 privacy policies into one.
The Electronic Privacy Information Center has called on the Federal Trade Commission to investigate Google's privacy policies, stating, "Google’s business practices raise concerns related to both competition and the implementation of the Commission’s consent order.” The consent order refers to the recent settlement between the FTC and Google that "establishes new privacy safeguards for users of Google products and services and subjects the company to regular privacy audits."
The Official Google Blog states that "Regulators globally have been calling for shorter, simpler privacy policies—and having one policy covering many different products is now fairly standard across the web."
One policy, one Google experience [Google Policies and Principles]
EPIC letter to the FTC [EPIC]
EPIC Urges Trade Commission to Investigate Google Search [EPIC]
Google’s “simple” new policy to track you across websites [Consumers Union]