"When GoogleUpdate communicates with Google servers, it sends IDs of GoogleUpdate-managed applications on your computer and general usage information for these applications. GoogleUpdate also uses its own, randomly-generated unique ID number to accurately count total users. This information includes version numbers, languages, operating system, and other install or update-related details, such as whether or not the applications have been run."
Some people are concerned that Google collects even more information. To show that these worries are misguided, Google decided to open source the updater, code-named Omaha.
Since Google Update is always running on your system, there's no simple way to stop it, and since it's a fundamental part of the Google software that needs it, it's not explicitly installed. Some users can be surprised to find this program running, and at Google, we don't like disappointing our users. We've been working hard to address these concerns, and releasing the source code for Omaha is our attempt to make the purpose of Google Update totally transparent. Obviously, we understand that not everyone is both willing and able to read through our code, but we hope that those of you who do will confirm for the rest that Google Update's functionality serves well to keep your software up to date.
A software that's always up-to-date prevents malware from exploiting the already solved security issues, makes it easier to report bugs and it's constantly improving, but Google should provide an interface that lets you control how often the service checks for updates and even disable it. Some power users think that the always-running updater is "a violation of my control as a user, a potential security threat, and an unwanted burden on my system and network resources, which are already stretched."