Google Shopping is a paid product listing marketplace for online retailers, which works in a similar way to Adwords Text Ads (you pay per click).
The customers can compare prices between merchants.
Instead of providing keywords, Google extracts keywords from your titles and descriptions that you provide in your data feed.
You as a merchant can sell products that are available on your website and list them on Google Shopping.
Google displays your products and when a customer clicks on your ad, the person will be redirected to your website where the individual can make the purchase.
Both are very similar but displayed slightly different.
Google Search / Web
Shows a limited offering for the top merchants mostly between 2 and 16 listings
Can show up to 36 products, these products are located under the Shopping tab on google.com
Google Image Search
Google will also begin showing product on image search results, these are currently only available in the US. The image below demonstrates how it looks like on a mobile devices. These results are not limited to mobile and will also be shown on desktop devices.
Google extracts the keywords based on the data feed you provide. The two fields that are used are, Title and Description to determine your product relevance.
You can’t, Google takes the keywords from your titles and descriptions. You can however add negative keywords, by adding exact match, phrase match or broad match.
This allows you to control your advertising filtering out keywords that you don’t want to appear for.
You can do this in several ways, by creating a data feed in a form of a text-delimited file, xml file, using a plugin or SaaS.
When choosing your tool, I recommend reading What is a Google Shopping Management Tool?
Improving your ranking requires work on the product landing page, data feed and Adwords campaign setup. I have written a great article on how to improve impressions in Google Shopping.