It certainly didn't take Google (NASDAQ:GOOG) all that long to graduate to the head of the class. Less than eight months after being initiated into the Standard & Poor's 500 equity index, the search engine giant is being promoted to join the elite S&P 100 ranks as well.
With index component HCA (NYSE:HCA) being acquired by a consortium of private equity firms, there was a vacancy in the prestigious inn, and it's great to see Google land the room. I was steamed at this time last year when S&P chose homebuilder Lennar (NYSE:LEN) to enter the less selective S&P 500 country club before Google.
The index learned a lesson there. It probably thought it was going with the smaller yet more stable real estate developer, but its timing was more poor than standard. The housing market began to crumble and Lennar's shares have fallen by more than 10% over the past year as Google's stock has soared 30% higher.
Even though the S&P 100 isn't as widely followed as the S&P 500, it can't hurt Google to be snapped up by institutional investors running index funds that mimic both gauges. The S&P 100 was also hungry for a pure Internet player.
Companies like eBay (NASDAQ:EBAY) and Yahoo! (NASDAQ:YHOO) have been sitting on the S&P 500 for a long time but have never made the S&P 100 cut. The closest that the constituents in the choosy index get to having an online bent would be MSN.com parent Microsoft (NASDAQ:MSFT) and AOL's Time Warner (NYSE:TWX).
Congrats, Google. Just as your stock finds itself a good trading day away from hitting the $500 mark, it's good to know that you can be honored by hitting the 100 mark too.
Yahoo!, eBay, and Time Warner are Motley Fool Stock Advisor recommendations. Microsoft is an Inside Value newsletter selection.
Longtime Fool contributor Rick Munarriz is a huge fan of Google and it would be his homepage if it weren't for Fool.com taking up that piece of real estate. He does not own shares in any of the companies in this story. Rick is also part of the Rule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has adisclosure policy.
