Once again, the corporate behemoth that everyone either respects or fears got the short end of the indexing stick. It won't be Google (NASDAQ:GOOG) replacing AT&T (NYSE:T) in the S&P 500 once Ma Bell goes off to live with one of the kids -- SBC (NYSE:SBC), to be exact. Just as Google was passed over in favor of Lennar's inclusion last month, this time it will be Amazon.com (NASDAQ:AMZN) filling up the vacancy over the weekend.
In many ways, Amazon deserves to be a part of the stock market's most popular gauge. It's the bellwether for the fast-growing e-commerce sector. The company may have been the poster child for the Internet bubble, with its penchant for favoring traffic growth and a leveraged balance sheet over profitability, but Amazon finally came around. These days it's consistently profitable, and credit rating agencies have been upgrading the company's debt lately.
Just as importantly, mainstream retailers have also come to lean on Amazon.com to leave their mark in cyberspace. Traditional outfits like Target (NYSE:TGT), Toys "R" Us, and Office Depot (NYSE:ODP) have partnered with Amazon to help fortify their online presence.
Amazon shares have nearly tripled since being singled out in the Motley Fool Stock Advisor newsletter service three years ago. That's certainly not too shabby, but it brings us back to Google, whose stock has quadrupled since going public just 15 months ago.
Google is now the most valuable Internet company in terms of market capitalization. That's why, as worthy as Amazon may be, the market still thinks that Jeff Bezos' company is worth just a sixth of Google. It's why Google's turn to join the famous index can't be too far away. All we need is just a little more sector consolidation to open up some more vacancies.
Or better yet, I've got a novel suggestion for Google: Go ahead and buy a member of the S&P 500 and buy your way in. Lennar? eBay? JDS Uniphase (NASDAQ:JDSU), if you must. Do it, if only for the entertainment value of really ticking off the S&P camp.
One way or another, Google is going to eventually wind up where it belongs.
Amazon, eBay, and SBC are all Motley Fool Stock Advisor recommendations.
Longtime Fool contributor Rick Munarriz has been a satisfied Amazon.com customer since the 1990s. He does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
