Google (GOOG) shares are up another $3 this morning after rising nearly $6 yesterday, the first day every share of the Internet search company was available for sale. It appears that demand for the shares is more than adequate to soak up a little extra supply (little because any shares that will be sold by company insiders will be unloaded in a slow and orderly fashion, as opposed to all at once).

What lies ahead for Google in the short to intermediate term? How about inclusion in the S&P 500? With a market cap of more than $50 billion, Google would find itself in the top quintile of companies in the index (based on market cap) upon its addition. With so many mergers and acquisitions being announced recently (AT&T and Gillette are two examples of S&P companies that will need to be replaced), it is only a matter of time before index funds will have to gobble up Google shares.

The largest S&P 500 fund, Vanguard Index 500, had $106.6 billion in assets as of 12/31/04. If Google was added to the S&P today, that fund alone would need to purchase more than $500 million in stock, about 1% of the company's total outstanding shares. As a result, the announcement of Google's inclusion in the S&P 500 will only serve to further buoy the stock price, and help to absorb the recently increased float.