Google has announced that they will be retiring Product Extension ads in late May 2013, which comes after Product Listing Ads were introduced to advertisers last year.
Google says that advertisers have seen better results from their paid model of Product Listing Ads and as a result, they will retire Product Extensions which will no longer be a separate ad extension in AdWords campaigns.
Product Extensions are additions to text ads on a search engine results page that include a small image and pricing of the product the user searched for.
Google recommends that advertisers implement Product Listing Ads in order to capture commerce-related searches and promote products on Google.com and within Google Shopping. In addition, Google has introduced new product feed specifications that merchants must comply with by July 2013.
Advertisers can still implement Sitelinks, Location Extensions, Call Extensions and other ad extensions discussed here.