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E-Commerce retailers have seen this coming for a while, but now it's official. From the post: "...we are starting to transition Google Product Search in the U.S. to a purely commercial model built on Product Listing Ads. This new product discovery experience will be called Google Shopping and the transition will be complete this fall. We believe that having a commercial relationship with merchants will encourage them to keep their product information fresh and up to date. Higher quality data -- whether it’s accurate prices, the latest offers or product availability -- should mean better shopping results for users, which in turn should create higher quality traffic for merchants."
You have to love the typical corporate newspeak Google uses these days. Orwell would love it. You have to read a few times until you realize that it's not free anymore. First they have downranked most other shopping search engines now they can reap.
Google really tried to monetize all those product feeds by pushing Google Commerce Search. It was an easy sell -- you already provide your feeds, now all you have to do is a quick integration. I don't think it had as wide of the adoption as Google hoped for.
This post actually explains the ramifications without euphemisms: http://inbound.org/ecommerce/2012/05/google-product-search-to-become-google-shopping-use-pay-to-play-model/