The Verge article is very good at explaining the actual details. However, although IANAL, I think they missed on one part of their explanation:
They say:
But what about that line about granting rights for "promoting and improving our Services," you ask? ... and then conclude that sort of behavior is forbidden by the Google privacy policy
but part of the Privacy Policy they quote also says:
We use the information we collect from all of our services to provide, maintain, protect and improve them, to develop new ones,...
So it would seem to me that legally that's still a fairly wide scope for what they could potentially do under the umbrella of improving existing and developing new services.
The article highlights a different part of the Privacy Policy: We will ask for your consent before using information for a purpose other than those that are set out in this Privacy Policy.
... but given the previous clause, there seems to be a pretty big umbrella of things that _are_ set out in the Privacy Policy.
I'd put them pretty far down on the list of companies not to trust.
I think this is the bottom line in both The Verge article and your comment - whether you trust the company is ultimately more important than the details of the ToS.