Google to become newest blue chip stock?

That's the rumor, now that former Dow Jones Industrial Average (DJIA) bigwigs Citigroup and General Motors are trading below $2 and may get booted from the index. With two potential open spots, the other likely new DJIA member is Cisco. And that means that even in this down economy, the smart money is on the Web and IT.

According to published reports, Google and Cisco are the front-runners in a list of diverse contenders, including Goldman Sachs, U.S. Steel, Visa and Apple, vying for the open spots should Citigroup and GM get nixed. But Google and Cisco are the more likely candidates simply because their businesses affect more people on a daily basis. For example, Reuters quotes analyst Barry Ritholtz, chief marketing strategist of Fusion IQ in New York, saying:

"I don't have much interaction with Exxon Mobil [a current member of the Dow], but I'm on Google 47 times a day. Indirectly that means I'm interfacing with the plumbing of Cisco."

No word yet on whether the changes will actually go through. Investors have been calling for changes to the DJIA lineup for years, with no luck so far. But with GM at $1.90 a share and Citi trading at a dismal $1.60 a share--even after yesterday's rally--things look good for Google (trading at a strong $314.11 per share). And for Google's investors, who can tell their grandchildren how they bought stock in a little search engine back in the 2000s ...

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