SAN FRANCISCO (AFX) -- Internet-sector stocks took a bruising Tuesday as shares of bellwether Yahoo Inc. lost 3.6% and Google Inc. and Amazon.com Inc. fell 1.5% each.
EBay Inc. shares, however, stood out with a small gain as the company said that it will pay around $27 million in stock for Sonorit Holding, a provider of voice technology for the Internet.
The Dow Jones Internet Index closed down 1.1% to 96.20, while the technology-heavy Nasdaq Composite Index was down 22.92 points to 2,310.35.
EBay closed up 0.6% to $38.32 as the company bought Sonorit in an effort to boost technology for its Skype property. EBay will issue 700,000 shares in a deal that's expected to be immaterial to 2006 earnings per share.
Yahoo shares closed down 3.6% to $31.39. Two analysts reiterated their share ratings on the Internet media giant, which reports its quarterly results next Tuesday.
Oppenheimer reiterated its neutral rating, yet wrote that it would look to upgrade 'on news of stabilizing search share and successful monetization improvements,' when Yahoo reports.
Piper Jaffray analyst Safa Rashtchy reiterated his outperform rating, citing recent checks with advertisers and analysis of search data.
'We believe there is a good chance for revenue upside, and we expect the stock to react positively to any top line upside,' wrote Rashtchy.
Late Monday Nick Raich, director of equity research for the Private Client Group at National City Corp., weighed in on Yahoo's share price. Listen to audio interview.
RealNetworks Inc. shares slipped fractionally into the red after marking their 52-week intraday high earlier in the session. Napster Inc. shares fell 7.4% while Audible Inc. shares fell 9.6%.
Among rising shares, Akamai Technologies Inc. showed resiliance to gain 4% at $31.21, while Expedia Inc. shares gained 2.5%.
In MarketWatch commentary, Bambi Francisco writes about Walt Disney Co.'s decision to provide television shows on the Web a day after they are broadcast.
Also, Internet Daily columnist Frank Barnako of MarketWatch writes about the 10th Annual Webby Awards. This story was supplied by MarketWatch. For further information see www.marketwatch.com.