New York Times reports:

Google executives said last night that the company planned to move quickly to capitalize on its new Google Base database service, adding a feature that lets merchants provide local shopping information.

Many publishers had become concerned about the potential of Google Base, which could allow the company to dominate the classified advertising business. Now, publishers of services like the Yellow Pages are facing a competitive threat from Google.

Google, based in Mountain View, Calif., said that beginning this morning it would make available a feature that provides a local version of its Froogle shopping service. The service uses a third-party database of national product inventory organized by locality.

Additionally, local merchants will be able to send Google product information that will be searchable from Froogle. For example, if users type "iPod Nano New York," they will see map information with the locations of stores that have the iPod Nano in stock.
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Google declined to identify the third-party information service that would provide the initial product inventory information for local stores, but it said there would be data from "several hundred" chains, like Best Buy, Circuit City, Home Depot, Bombay and CompUSA.

The limitation of the service, Google acknowledged, is that the inventory information might not be precise or necessarily up to date.

The service will be freely available to merchants in the United States, Ms. Mayer said. Google, as it frequently notes, plans to gain revenue from the new Froogle service by placing relevant text ads on the same page as the local results.