Ebay buys local shopping site Milo

A pedestrian walks at the headquarters of eBay in San Jose, California February 25, 2010.

SAN FRANCISCO (Reuters) - EBay Inc has acquired shopping engine Milo.com, underscoring the growing allure of local services even as fellow Internet giant Google ponders buying discount coupon site Groupon.

Shares in eBay rose over 2 percent.

EBay, whose marketplaces site connects buyers with sellers of a vast array of goods, said on Thursday it planned to integrate Milo's local product feeds onto its own site, as well as its mobile applications.

Milo lets users see in real time whether goods they seek are available in neighborhood stores. The company has more than 140 retail partners, including 90 small and medium-sized businesses, making up about 50,000 stores across the country.

"Milo's mission is to bring every product, on every shelf, of every store in the physical world onto the Internet," Palo Alto-based Milo says on its website.

Companies like Google and eBay are keen to gain a window into the fast-growing local market, while brick-and-mortar retailers are anxious to lure more shoppers to their stores in the face of intense competition from online retailers.

eBay's announcement comes as online retailer Amazon.com is reportedly in advanced talks to invest in LivingSocial, Groupon's closest rival. Both fast-growing discount sites offer daily deals based on geographical location.

Rather than competing with brick-and-mortar retailers as top online seller Amazon.com does, Milo works in conjunction with them to deliver shoppers to their doors.

EBay's acquisition -- terms of which were not disclosed -- comes as Google is in the midst of negotiations to buy local coupon site Groupon, according to sources. Reports peg a potential deal as being worth up to $6 billion.

EBay, which also owns Web payments unit PayPal, said the acquisition was not expected to have a material impact on its previously-issued financial outlook.

Shares of eBay rose 2.4 percent to $29.95 on the Nasdaq.

(Reporting by Alexandria Sage)