You can sync contacts through an Exchange server instead.
I think you have a general misunderstanding of how information is provided to advertisers. It's more along the lines of X many people visited Y site. It's not, here's a list of all people who visited this site including their names, contact info, here's all email they sent and a list of all their friends and family. You would be advised to review the privacy policy of google here:
http://www.google.com/privacypolicy.html
If you believe them to be dishonest and don't trust them staying true to their privacy policy, then you have to make a decision about which corporations you do trust... verizon?.. what kind of computer do you have?... Microsoft?... Apple?... all of these companies could in effect work outside their own privacy policy and gather personal information about you and the people you communicate with.
Google has a pretty awesome approach to privacy and responds to all complaints about the protection of privacy. Send your concerns here:
Privacy Matters
c/o Google Inc.
1600 Amphitheatre Parkway
Mountain View, California, 94043
USA
Perhaps with your concerns you'd be best advised to use something along the lines of a blackberry device and only sync your information through the desktop manager software.