Because of the huge amount of data that Google has, it knows detailed information about every active person on the Internet. Does Google really know who you are? Is this a bit exaggerated? But for many webmasters, it's not exaggerated at all.
Take myself as an example. Since I use Gmail, Google knows what I usually talk about with my friends and colleagues, and based on this information, Google even places ads inside Gmail emails. Google also knows who I frequently contact.