There are a bunch of people out there who believe The Kelsey Group overhypes local. And that's certainly the lens through which we view the world. But if you pay attention, we clearly have a balanced view of the local marketplace (the fragmentation, complexity, inertia). But now that I've said that, let me go out on a limb and say that Google Base is ultimately about local. Not just, not only; but that's a big piece of what seems to me to be going on.
Why do I say that?
Google gets all its content from crawling, and the company does that brilliantly. But what do throngs of consumers really want? Local information. Sure, more and more say they'll opt for the convenience and crowd avoidance of online shopping. But 95% (or more) of transactions still happen in the real world.
Consumers increasingly use the Internet for research before they buy, but they still make purchases largely offline.
And more broadly, what consumers are hungry for online is local news, events, services, restaurants and retail information. Where can I buy that stove or that camera — today? Or if I buy it online can I pick it up locally today?
Google Base becomes a way for Google to directly acquire a great deal more of that local content that the company cannot get through crawling. It's one of several strategies to get local information into the database (direct feeds from Citysearch and SuperPages are another). On Froogle I can buy online or, in the not too distant future, I'm likely to be presented with information about where I can buy something locally too (courtesy of Google Base).
More generally, Google can take that local content (jobs, cars, real estate, products, etc.) and send it to whatever "distribution point" it considers appropriate (Froogle, Local, etc.). It becomes a way for Google to start providing comprehensive information to users, not just about online but also much more about the real world in which they spend most of their time.