We aren't on the inside with regard to top level decisions. Who knows?
Regardless, Local faces enormous opportunity, challenges, issues, and problems. Its a major endeavor IMHO, and probably similarly major by those who follow Local closely.
Just to list a few of those challenges and opportunities:
1. Local expenditure will skyrocket and boom over the next few years.
2. Google will attract a lot of that spend.
3. Other players will attract enormous amounts of that spend including potential Google Partners.
4. If the partners take their piece out of the spend in Google before Google does, and that is highly likely, it will dramatically hamper profitability in that arena.
5. There is enormous and growing competition in the local arena including the other SE's, Facebook, Twitter, Yelp, and a huge and growing variety of competitors. Will traffic into the local arena be fractured and fractionalized amongst a huge volume of players or will Google dominatete that world?
6. Ranking in Google Places is far easier to manipulate and spam than is google.com. The ranking spam is proliferating. Will Google be able to catch it effectively and control it?
7. There is a growing unhappiness with significant, virtually nonexistant customer service and response to the growing volume of smb's that populate Google Local with their websites, places records, and advertising. Will Google up the level and quality of response to problems.
That is a short list of the current challenges. Its a lot to deal with. As the volume of revenues that pours into internet Local advertising increases at a dramatic clip, the question is...how well will Google do in capturing its share?
Demotion, promotion, lateral move....who knows. Meanwhile I believe its a huge challenge.