Google’s ambition to maximise the personal information it holds on users is so great that the search engine envisages a day when it can tell people what jobs to take and how they might spend their days off.

Eric Schmidt, Google’s chief executive, said gathering more personal data was a key way for Google to expand and the company believes that is the logical extension of its stated mission to organise the world’s information.

Asked how Google might look in five years’ time, Mr Schmidt said: “We are very early in the total information we have within Google. The algorithms will get better and we will get better at personalisation.

“The goal is to enable Google users to be able to ask the question such as ‘What shall I do tomorrow?’ and ‘What job shall I take?’ ”

The race to accumulate the most comprehensive database of individual information has become the new battleground for search engines as it will allow the industry to offer far more personalised advertisements. These are the holy grail for the search industry, as such advertising would command higher rates.

Mr Schmidt told journalists in London: “We cannot even answer the most basic questions because we don’t know enough about you. That is the most important aspect of Google’s expansion.”

He said Google’s newly relaunched iGoogle service, which allows users to personalise their own Google search page and publish their own content, would be a key feature.

Another service, Google personalised search, launched two years ago, allows users to give Google permission to store their web-surfing history, what they have searched and clicked on, and use this to create more personalised search results for them. Another service under development is Google Recommendations – where the search suggests products and services the user might like, based on their already established preferences. Google does not sell advertising against these services yet, but could in time use them to display more targeted ads to people.

Yahoo unveiled a new search technology this year – which monitors what internet users do on its portal, and use that information to build a profile of their interests. The profiles are then used to display ads to the people most likely to be interested in them. The technology will be incorporated into Yahoo’s advertising revamped advertising system dubbed Project Panama.

Autonomy, the UK-based search company is also developing technology for “transaction hijacking”, which monitors when internet surfers are about to make a purchase online, and can suggest cheaper alternatives. Although such monitoring could raise privacy issues, Google stresses that the iGoogle and personalisation services are optional.

The Information Commissioner’s Office in the UK said it was not concerned about the personalisation developments.

Earlier this year, however, Google bowed to concerns from privacy activists in the US and Europe, by agreeing to limit the amount of time it keeps information about the internet searches made by its users to two years.

Google has also faced concerns that its proposed $3.1bn acquisition of DoubleClick will lead to an erosion of online privacy.

Fears have been stoked by the potential for Google to build up a detailed picture of someone’s behaviour by combining its records of web searches with the information from DoubleClick’s “cookies”, the software it places on users’ machines to track which sites they visit.

Mr Schmidt said this year that the company was working on technology to reduce concerns.