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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Retail inventory has been revving up as a new, highly mobile-oriented tool for retailers to highlight stock on hand and steer consumers to store locations. It is an important lead-generating feature on new shopping portals, such as FindnSave. Research by JiWire shows that 62 percent of consumers seek product availability when researching goods online. The company also notes that “low consideration goods found in local shopping centers” are core to inventory promotion.

Key entrants in the space include JiWire, via its acquisition of NearByNow; eBay, via its $75 million acquisition of Milo.com last year; ShopSavvy; and now Google, which is diving in via Google Product Search, a spin-off of Google Base, the now defunct classifieds aggregation product.

Vancouver-based Wishpond, an angel-funded company, is another entrant. Wishpond has largely positioned itself as a platform, equally focusing on inventory from both local and national retailers. The others have focused more explicitly on national retailers.

The company has signed up 1,700 retailers in the U.S. and Canada and seeks to differentiate itself by enabling merchants to upload their product inventory in a variety of ways. In addition to providing retailers with free self-serve management tools, merchants can import their inventory via Web crawling, shopping cart plug-ins, batch upload, through their Point of Sales system and other methods. Wishpond also goes beyond inventory by adding real-time price checks, stock availability checking and merchant meta data. It offers these data to publishers and mobile app developers through an open API.

We don’t comment here on how unique these solutions are. All the contenders in the space claim to be unique. But the combination of broader reach and inventory upload options have helped Wishpond build an inventory of 6 million products, or twice as many as reported by Milo.com, which has some local stores but is more focused on a number of large, core accounts.

“The consumer starts their search for a product or item, not a retailer,” says Wishpond founder and CEO Ali Tajsekandar. “We help retailers get their products seen by local consumers wherever they are searching online — Facebook, Twitter, Google, Mobile and more.” By working with Wishpond, retailers will see their product inventory distributed to search engines and other sites where consumers are most likely to search for it, including Google Product Search, Facebook, Twitter and various mobile apps.

Wishpond also helps companies manage their online promotions on various ad channels and social networks. “We can help a merchant set up a Facebook “store” in a few clicks,” he notes. “Once connected, the fans can browse promotional products or search full inventory and find location details on the nearest branch that carries a given product.”

While monetizing has not been a core focus as it ramps up, Tajsekandar notes that Wishpond has a program for upselling stores to various SEM packages for merchants that want to give their inventory and promotions greater visibility.

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The ability to track retail inventory has been on the retail wish list for years. Retailers advertise goods, and then disappoint customers when they don’t have them in stock. Or they have loads of stock in the store, and don’t know they need to promote it to deplete it. Or they have a lot of inventory in one location, but can’t steer customers to the right store.

Solutions have been in the works for some time, for various functions and purposes. Some have been telecom-oriented. McDonald’s, for instance, started keeping track of Big Macs and Double Cheeseburgers in 1990 via ISDN. Most, however, have been relatively primitive phone-in efforts.

In 2006, for instance, StepUp, which is now part of Intuit’s Homestead, showed the way for online inventory management by letting stores fill out inventory on a spreadsheet. A sophisticated, contemporary effort has been mounted by Krillion, which provides inventory for computers, electronics, cameras, appliances and other goods, while selling advertising around it.

More recently, we’ve also seen Milo.com develop an inventory solution for both national and local players. Wishpond is pursuing a similar strategy. The timing for both companies appears to be ripe. Milo.com was purchased two weeks ago by eBay for $75 million.

Milo has integrated with various media partners, such as The Sacramento Bee. Today, Wishpond announced a partnership to do the same with PaperG, which builds display ads on the fly for a large list of newspapers. In this case, PaperG will be able to spec out a display ad based on inventory availability (i.e., “denim hats at Davey’s Army Navy store”). Customers of its PlaceLocal service can utilize the service.

PaperG CEO Victor Wong tells us that Wishpond’s solution lets PaperG and its media partners get down to the product level for both national chains and for local stores. Roughly a quarter of its advertisers are local SMBs, he notes. Using Wishpond, “toys are ads,” he says.

“The next natural evolution to local display advertising is to show what stores and products are available within driving distance of the consumer,” Wong added, in a statement. “Ad units that allow consumers to find information on local product availability can dramatically improve the offline conversion rates of shoppers.”

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In case you haven’t noticed, eBay has been ramping up a local strategy in the past few months via the integration of all its vertical properties with its home site, the $75 million purchase of Milo.com, and today, a $200 million acquisition of Brands4Friends, a fashion-oriented, German e-commerce site with 3.5 million members and 200 employees.

EBay’s efforts to acquire new local and vertical properties and integrate them with the home site is a perfectly logical growth strategy. Despite its perceived decline in the marketplace, eBay in 3Q 2010 saw 2 billion U.S. product searches — well ahead of competitors such as Amazon, which saw 847 million product searches, and Google, which handled 226 million product searches over the same period.

The push into local certainly represents a major change for the company. In the late 1990s, eBay backed off a comprehensive local strategy when it determined that a “Local Trading” feature concentrating on items that were too heavy to ship (i.e., sofas) didn’t have the traction to really work. Instead, it concentrated on building up eBay Motors, while adding various other verticals, such as Rent.com, an apartments site; StubHub, the ticket scalping site; and various classified services, such as Kijiji (eBay Classifieds), initially developed as a Craigslist lookalike service.

More recently, eBay worked on a new prototype for a comprehensive local portal, using eBay Motors as a base, while including its various classifieds properties, as well as other services. But that effort seems to have gotten lost in the midst of major corporate changes.

Inevitably, however, eBay has continued to push up against local as it looked for paths to growth. Five years ago, it acquired a site that eventually became eBay Stores, which now competes with players such as Web.com.

Milo CEO and Founder Jack Abraham tells us that eBay is handling the absorption of his site at the highest level. CTO Mark Carges personally led the acquisition effort, and VP of Engineering Dane Glasgow has been charged with the absorption. Abraham notes that the 25-person company’s small size makes it easy to move right onto the eBay campus. He also says that his team may be deployed on other eBay initiatives beyond local.

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The hordes of shoppers who still enjoy standing in lines and fighting for parking spaces on the “Black Friday” after Thanksgiving is an offline event. Or is it?

Local sites are prepping shoppers who want to see what’s available at the stores, including The Dealmap, Milo.com, Local.com and Superpages. Other local media companies, including the Los Angeles Times, are helping small businesses get in on the game for Cyber Monday.

American Express is also getting in on the game with Small Business Saturday, a promotion for SMBs that include a $25 gift certificate for consumers who shop participating SMBs, and a cash donation to Girls Inc. of $1 per “like” of the effort’s Facebook page (867,594 “likes” have been registered). We also noticed that Yelp is involved with the effort, listing several recommended local SMBs on a geotargeted basis, which is really useful.

The Dealmap’s effort is categorizing and mapping more than 150,000 unique Black Friday product offers at nearly 50,000 retail locations. Smartphone owners can use their phones to check out the deals when they are on the go, and will even be notified if they are near a deal. The site reports that 300,000 people have downloaded its app.

Milo.com is also in on the game, providing sales information and, more important, real-time inventory feeds for more than 5,000 products. Its inventory feeds will include major chains, such as Target, Toys “R” Us and Macy’s.

Local.com, meanwhile, has integrated the local and daily deals from The Dealmap along with major retailer coupon codes and deals from Savings.com; loyalty card coupons from Coupons.com; and weekly circular ads from ShopLocal. Superpages.com has also done a great job integrating various kinds of coupons.

The LA Times, for its part, is supporting Cyber Monday with a Shopping Directory that is being published in its Main News section on 11/29, and also accessible on latimes.com.

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