Dow Jones & Co Inc has been talking to potential buyers about the sale of its stock market index business, including the Dow Jones industrial average <.DJI>, the company's Wall Street Journal reported on its website.

WSJ.com, citing people familiar with the matter, reported on Friday that Goldman Sachs is leading the discussions on behalf of Dow Jones, a division of Rupert Murdoch's News Corp , since it was purchased in 2007 for $5.7 billion.

Since then, Murdoch has come under criticism for paying such a hefty price for a publishing company whose businesses have suffered from the sharp drop in ad sales. Earlier this year, News Corp wrote down $2.8 billion in Dow Jones' value.

Even though the index business is not dependent on advertising -- making it a steadier revenue source for Dow Jones during downturns -- industry analysts never felt it was much favored by Murdoch, a passionate backer of newspapers and one of the best-known media moguls.

Indeed, a number of analysts expected him to consider a sale of the index business soon after striking the deal for Dow Jones. Representatives for News Corp declined to comment.

Potential buyers might include McGraw-Hill Cos Standard & Poor's, Russell Indexes, MSCI Inc , Bloomberg, Pearson Plc's
Financial Times and Thomson Reuters Corp . All of those companies declined to comment.

The Wall Street Journal, in its report, said the process was still in its early stages, and could result in an arrangement other than a sale, like a joint venture.

NAME CHANGE?

Anchored by the Dow Jones industrial average, the best-known measurement of U.S. stocks, the company's indexes business creates and licenses trading indexes.

Dow Jones Indexes has more than 700 licensees and a supporting staff of more than 160. It has offices in New York, Boston, Los Angeles, Princeton, London, Paris, Stockholm, Zurich, Madrid, Frankfurt, Hong Kong and Beijing.

Charles Dow, Edward Jones and Charles Bergstresser introduced the index in 1884, and today it contains such corporate blue-chips as General Electric Co , IBM and McDonald's Corp .

Because the name is so well known -- even if the index itself has been somewhat eclipsed by broader measurements like the Standard & Poor's 500 <.SPX> in recent years -- any buyer would face a dilemma: Change the name and use it for branding; or keep it, stick with tradition and miss out on the opportunity to market a new brand.

Any change in ownership could have an impact on the growing business of exchange-traded funds (ETFs) -- investment products that mimic and include many major indexes' components.

Just as they're one of the three or four biggest index providers, they're one of the three or four biggest index providers in the ETF universe, said Matthew Hougan, director of ETF analysis at IndexUniverse.com. It's conceivable that whomever buys them could streamline or alter the index mix, and people would have to shift their portfolios. You could also see changes in methodology.

Investors can hold ETFs based on indexes from S&P, Nasdaq, Russell and Dow.

The Dow Diamonds ETF (DIA) was the 17th largest ETF in terms of assets as of July 30, 2009, according to the National Stock Exchange, which tracks ETF data, with $7.29 billion in assets.

Other large ETFs created through the licensing of Dow products include the iShares Dow Jones US Select Dividend ETF, with $3.26 billion in assets, and the ProShares Ultra DJ Financials, with $2.34 billion.

(Reporting by Paul Thomasch, David Gaffen, Nichola Groom and Deena Beasley; Editing by Matthew Lewis, Gary Hill and Carol Bishopric)