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Google Moves on the Business Market

Google is by far the most popular search engine on the internet worldwide. There are few people who have used the web that haven`t tried Google, and those people clearly don`t know how to search for information. The mega business started from nearly nothing, and today has grown into a major company with major investors on the stock market. At the close of trading this Friday, Google (Nasdaq: GOOG) officially joins the S&P 500.

Wall Street pundits and speculators have been abuzz with predictions about the effect this will have on the index -- as well as Google stock. ?Rebalancing? has been the operative word. ?No doubt, index fund managers have some movin? and shakin? to do,? says Investment U?s D.R. Barton Jr. "Although rebalancing is a lot of work for fund managers, the event is shaping up to be ?much ado about nothing? for the rest of us,? he says. Index-related funds have to change their portfolios to reflect the change from ousted Burlington Resources to newly anointed Google.

Credit Suisse First Boston estimates that in total, index funds will have to drop Burlington Resources, selling off about $1.6 billion in total. They then have to buy $6.8 billion of Google stock. In order to make up the difference, funds will have to rebalance their portfolios by selling off $5.6 billion worth of other stocks. The bottom line is this: For investors who do not have Google in their portfolios, the effect of its addition to the S&P 500 index should be minimal.