The application has been created using Google's AJAX Search API, the only search API still supported by Google.
At the moment, Google only uses your web history to personalize search results. Maybe in the future you'll be able to share some parts of your logs with your friends (for example, your bookmarks) and obtain better search results by using information from the profiles of your contacts. Yahoo tried to do this with MyWeb 2.0, but failed.
With the release of MyWeb 2.0, Yahoo has added an extensive array of new features focused on community-based searching and sharing of information. "It basically enables people to tap into each other's personal web by searching their trust network of friends," said Eckart Walther, vice president, product management, Yahoo. (...)
Yahoo has also developed a new relevance algorithm called "MyRank" for MyWeb 2.0. "It's a new search engine that we wrote that can search across thousands of nodes and millions of pages in a trust network," said Walther. Unlike PageRank and other link analysis techniques used by general-purpose search engines, MyRank is designed to ferret out clues to relevance based on the pages you and your community have saved to MyWeb 2.0.
Source: Unofficial google blog