When eBay purchased Jack Abraham’s Milo.com in December 2010, it caused some head scratching. While retail Inventory is helpful to track goods availability and has some value in developing location-based promotions, it seemed an unlikely anchor for eBay’s SMB and local ecommerce services.

Abraham’s upgrade of his title to head of EBay Local last year, however, indicated that changes were afoot. And this week, eBay has finally unveiled the fruit of his labors: eBay Now, a same day delivery service that builds on inventory to take it to the next logical step.

The service, following in the footsteps of first generation local services such as Kozmo.com and UrbanFetch, has launched in San Francisco with BestBuy, Bloomingdales, Nordstrom, Target, ToysRUs and Walgreen. It is mostly aimed at luring major merchant accounts to eBay’s broad range of merchant services.

Deliveries are $5 and available for orders over $25 from 9-9 during the week, and from 9-6 on Sunday. Three free deliveries per customer are available during the test. Other Milo customers that might jumpo in include Home Depot, Ikea, Lowe’s, Sears and J.C. Penney.

Strategically, eBayNow positions eBay against other ecommerce heavyweights seeking to provide a suite of etail services, from promotions to search to transactions to hosting…specifically Amazon (although Amazon indicated this week that it will not be providing a similar service.) Long-term, Google and others that are developing transaction marketing services could also compete. Uber, the Web-based limo reservations service, is also experimenting with delivery, although it isn’t clear whether the limited delivery services that have been introduced are merely meant to promote the limo service while cars sit empty.

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Inventory hasn’t yet emerged as a “must have” for merchants, but the strategic importance of tracking store inventory remains undiminished. Merchants will potentially use inventory levels to drive users to specific locations, build promotions to get rid of overage (or remove promotions when supplies are running low).

While far from universal, many national retailers are beginning to use various inventory services, including eBay’s Milo.com, Gannett’s ShopLocal, Local Corp.’s Krillion, Wishpond , Sale Locator, Retailigence and various other services.

EBay’s purchase of Milo.com in December 2010 as an anchor for its eBay Local unit really caught our attention. We caught up with founder and eBay Local head Jack Abraham this week.

Abraham sees a world where Web product search and physical store visits converge. “You’ll make your decision on the Web to come into the store,” he says. Three key areas being targeted for inventory-based marketing include electronics, home & garden and apparel. Each of these areas not only relate to product sales, but possible service extensions as well, such as for contractors.

The move toward inventory-based marketing, however, is happening slower than Abraham would like. Nevertheless, he cites a growing number of relationships, and remains confident that it will happen, perhaps via media partnerships. A Milo deal with Find n Save, the shopping product from eight major newspaper companies, is a start in this direction.

Meanwhile, Abraham is seeking to leverage eBay’s role as a tech partner for both national and local merchants, comparing eBay favorably to Amazon, with which it has an increased rivalry. “Unlike Amazon, there is someone on their side that wants to help them,” and who “reaches them at the decision point,” says Abraham.

While Amazon Stores has a huge body of merchant customers, it has recently run afoul of some merchants with its price comparisons feature. Indeed, some merchants believe that working with Amazon is a Trojan horse likely to end up driving customers to its own site. EBay doesn’t have warehouses” to sell goods against merchants, notes Abraham.

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