AOL Follows Tech Sector Lower Ahead of Report

AOL falls before its postclose earnings report; E*Trade, at H&Q conference, lets the branding begin.
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SAN FRANCISCO -- America Online (AOL) shares dropped along with the rest of the tech stock world ahead of its earnings report, released after the close.

AOL reported that it earned $117 million, or 11 cents a share, for its third quarter ended March 31, beating the

First Call

consensus estimate of 9 cents a share. In the year-earlier period, the company earned $39 million, or 4 cents a share. Those numbers don't include results from


, which AOL acquired March 17 in a pooling-of-interests transaction, or other one-time events. Revenue for the combined firm climbed to $1.25 billion from $757 million a year ago.

AOL ended today's session down 7 at 155.

Other tech bellwethers also closed lower, which contributed to the weakness in the




(MSFT) - Get Report

closed down 4, or 4.5%, at 84;


(INTC) - Get Report

closed down 2 3/16, or 3%, at 62 1/4; and


(DELL) - Get Report

closed down 1 5/8, or 3.6%, at 43 3/16.

But the largest loser in the session was



. The company reported a loss of 13 cents excluding charges, which was equal to the

First Call

estimate. With so many Internet companies exceeding estimates this quarter, the company fell victim to a heavy dose of profit-taking amid disappointment about its quarterly report.

DoubleClick ended down 23 1/8, or 14%, at 148 1/2.


(EBAY) - Get Report

also fell prey to profit-taking despite topping both earnings and revenue estimates Monday. The stock traded to a high of 234 on the open, then slipped along with other Internet stocks as the day went on. It traded to a low of 203 at one point before settling up 1/4 at 208 1/4.

Shares of another online auctioneer also caught a bid, though not on the tails of eBay's earnings.


, a Canadian Internet auctioneer that began trading on the Nasdaq last week, rose 2 7/8, or 17.5%, to 19 5/16. and

American Interactive Media

will hold the first live streaming video and audio auction on the Internet tonight through


(RNWK) - Get Report


Also up on the day was


(AAPL) - Get Report


Goldman Sachs

put the stock on its recommended list from market perform. Apple closed up 4 13/16, or 12%, at 45 3/4.


(VRSN) - Get Report

volatile and choppy trade continued. Rating of the stock was cut by influential

Morgan Stanley Dean Witter

analyst Mary Meeker last week. It closed down 17 5/16, or 12%, at 124 1/16.

Internet IPO of the Day is


(RAZF:Nasdaq), a Web consulting firm. The stock was priced at 16 and more than doubled at its high of 38 7/8. It closed up 17 1/2, or 109%, at 33 1/2.

Let the Branding Begin

For the online broker industry, the branding war has begun.



Senior Vice President Jerry Gramaglia used the bulk of his presentation at the

Hambrecht & Quist Annual Technology Conference

to tout the online broker's new $50 million advertising campaign.

To drive home the point, he showed a handful of hilarious 15-second TV spots that are designed to lure a whole new swath of fledgling traders. The best of the ads, which were created by San Francisco's legendary ad agency

Goodby Silverstein

, showed an office drone who barrels into his bosses to announce that he's quitting after seeing a vertical spike in one of his stock charts. Seconds later, returning to his desk, he freaks out after reloading the chart and seeing an equally precipitous downward spike in the chart. The standing-room only audience roared with laughter after the red line popped up on the screen.

"The next 10 million accounts are coming from all walks of life," said Gramaglia, who heads up the company's sales and marketing division. "We wanted to create something that would not only play on


but also Ally McBeal."

The other big news of the presentation: E*Trade will launch a new upgraded site in three weeks. The site, said Gramaglia, will be faster, easier to use and smarter. "We think it's going to give



and AOL finance a run for their money."

But some analysts are concerned about competition.

"It's an interesting company, but I'm not convinced they'll beat



," said Mike Dubrow, an analyst for the

(WWWFX) - Get Report

Internet fund, which was up 133% year to date as of Monday.

Schwab "has a big head start, great execution, a great management team, and they make a lot of money online without cheapening the brand or cannibalizing existing

offline business," said Dubrow.

The biggest question marks surrounding E*Trade, said Dubrow, is what happens during a bear market. "In a bear market, there are fewer transactions," he said, and that is where the bigger firms will do better because they don't get the bulk of their revenue from small transaction fees.

-- Spencer E. Ante