Google - Directory or Search Engine?

After reading an article on Converseon.com http://blog.converseon.com/2010/08/13/google-removes-organic-results-in-local-tests/ I found myself deep in thought and quite frankly unable to do more work... "not always a bad thing".

According to latest reports Google have been doing some testing on displaying local search results. This left me with some questions that maybe you our readers can help me answer...

1. A bold move?
2. Do people want to use Google as a directory?
3. Are people already using people as a directory?
4. Does this mean the end of SEO?
5. Are Google possibly looking to incorporate a directory type listing into their NEW Google Caffeine look and feel?

We'd really love to hear your thoughts on this and whether you think this is the way forward for Google?