In order to better their services it is necessary for google to track you. Imagine you live in India, Hyderabad to be precise, and we're searching for nearby hotels. Now google customizes your search based on your past preferences, likes and locality which would be impossible without the users proper location and other details.
Data about human behavior is valuable as Google knows what the users want and can incorporate insights into their product development, anticipating consumer/market needs and staying "ahead of the curve" in terms of innovation