It's more obvious now, but I think it has been quite a process from day one and still a lot of customers don't understand how they pay for the services google provides.
http://www.pcworld.com/article/115692/article.html
EDIT: Quote > But Google is planning to scan e-mail and add advertisements that it thinks are relevant to the messages. Additionally, the Gmail privacy policy warns that messages, even if "deleted" by a user, may still be stored in the system, even long after users have closed their account--something that some privacy campaigners believe may be in conflict with U.S. and European data protection and privacy laws.
Article about privacy right there. I talk with people and they always say Google was forced into reviling they read people's gmail. Wasn't true.
The closest statements are mealy-mouthed ones along the lines of "we collect information about how you use our services and use that information to improve our services". Which is true of every single business in the history of the world.
> Our automated systems analyze your content (including emails) to provide you personally relevant product features, such as customized search results, tailored advertising, and spam and malware detection.
I think that statement is too general. From where I was sitting, it looked like people didn't think about privacy at all, and the only thing they were saying was "Holy shit, this is free!" Are you sure the people you tend to talk to are representative of the general population?
Your statement is did people care? That answer is if they did they wouldn't use Google services or FaceBook or most of the Internet.
http://www.infodocket.com/2014/04/30/privacy-google-no-longe...
https://news.ycombinator.com/item?id=11012392
They hid and lied about the facts about ad tracking of Education and Apps emails etc. until they were forced to testify about it in federal court and no one was clued into it. Once they got caught tracking and making money on it for many many years they rolled back some stuff. How is that clear communication?
Or how is that "Google has been very upfront on exactly how their business model works with users since day one." ?
I remember when people were scandalized by this, a minority in my circle but it was funny. Of course they were going to do that, what did they expect. I think Google is "evil" now for other set of reasons though.