ClickZ offers coverage of Google's statement at SES that "local" was bigger than the more established Froogle:
"[Marissa] Mayer said the demand for Google's local search product was surprisingly high. In fact, it drew more traffic in December than Google's shopping search product, Froogle, during the holiday shopping season, and without local search being linked from Google's home page."
Most of the action is offline near me or where I'm going. The Internet is a bigger and bigger influence on offline/local. Why should anyone be surprised?