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So are these good times or bad times for Internet stocks?

It's gotten harder to tell these past few months. Google(GOOG Quote), Yahoo!(YHOO Quote), eBay(EBAY Quote) and Amazon.com(AMZN Quote) have been tossing out the occasional small acquisition and new feature, yet investors have grown increasingly concerned that they're just not cutting the financial mustard anymore.

By the end of this week, everyone should have a better idea of just how bad or good things are getting: Yahoo!, eBay and Google are reporting their earnings (Amazon will report next week). First up is Yahoo!, the company that has the best shot of dazzling Wall Street with strong numbers.

"Yahoo! is the most interesting company," says Frank Husic, managing partner of Husic Capital Management. "It's a wonderfully run company, and it has the biggest opportunity to show capital gains."

Analysts polled by Thomson First Call are forecasting Yahoo! to post revenue of $796.8 million in the first quarter and EPS of 11 cents on a GAAP basis. A year ago, Yahoo! delivered 7 cents a share, beating the Street's estimates by 2 cents a share.

Any bit of good news would be welcome in the beleaguered Internet sector. Morgan Stanley's Internet Index is down more than 15% this year, trading at levels last seen nearly six months ago. Evidence in the previous quarter that margins at e-commerce companies were deteriorating was followed by concerns that search-related advertising was also seeing a slowdown in growth.

Two areas that aren't slowing much are branded advertising and banner advertising, where Yahoo! has a strong presence. While advertisers grow more cautious about advertising on radio and in print media, they are spending more than ever to brand themselves on the Internet. Online ads are expected to grow 30% this year, according to the Jack Myers Spending Forecast.

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