That's not selling user information in the same way that Ford doesn't sell automobile factories.
> They aren't directly selling the data itself
Nor are they indirectly selling the data. No one else gets the data.
> they are selling a service that is an extension of that data.
They are using the data to produce a service that they are selling, in the same way that Ford uses a factory to make a car. No one else gets the data, in the same way that no one else gets the factory from Ford.
> I think the semantics are negligible.
I think there is a substantive difference between transferring data to third parties and over whom neither the person the data describes nor Google exercises control and retaining the data internally and using it to provide a service to third parties. And I think that is a critical difference when it comes to privacy.
I mean, you erase the distinction between a armed security guard (who sells a service which involves a firearm) and an arms dealer (who sells firearms).
If you're implying that advertisers can target an specific user, this is false