Deutsche Morgan Grenfell's

Alan Braverman gave the Internet enthusiasts a shot between the eyes with a downgrade tonight of

Yahoo!

(YHOO)

,

Excite

(XCIT)

and

Lycos

(LCOS)

.

All three stocks, which he moved to accumulate from buy, have had incredible run-ups in the past few weeks, but are almost certain to get smacked in the early goings-on tomorrow.

The news comes at a time when

Donaldson Lufkin & Jenrette

is holding its Internet conference in San Francisco, and it could be seen as a counterattack to any positive reports out of that conference. In addition to the downgrades, Braverman maintained a buy rating on

America Online

(AOL)

and an accumulate on

Amazon.com

(AMZN) - Get Report

. DMG has led or co-managed offerings of Amazon in the past three years, but hasn't done that for the other firms.

The downgrade of Yahoo! follows yesterday's positive earnings report, after which a number of firms reiterated positive ratings for the company.

Dain Rauscher Wessels

, for one, reiterated a "buy-aggressive" rating on the company and set a 12-month target of 510 (not including the recently announced split).

In his report, Braverman said that stocks have been adjusting for the next quarter's earnings reports "earlier and earlier," so he feels compelled to issue his view sooner than he might otherwise have done. Second, he believes that most of the important news is already out for this quarter. "With so many of the cats out of the bag, there should be fewer upside surprises left for the blue-chip conference calls," he noted in his report. Like most downgrading analysts, Braverman remains optimistic about the so-called long-term prospects for the Internet sector.

Yahoo! did succumb to profit-taking today following its near 200-point run-up since Jan. 5, closing 32 1/2 lower at 368. Shares of Excite were down 4 7/8 to 69 3/8 today, but have rallied from the low 40s since the start of the year. Lycos reached a high of 131 on Monday, but closed down 7 5/16 at 96 15/16 today.

In this skittish environment, everything from Brazilian market troubles to whispers of analyst downgrades can move stocks sharply lower. Stocks like Yahoo! are now moving in 30-point chunks as volatility increases. Yahoo!, for instance, moved in a mind-boggling 74-point range in today's session.

That analysts are starting to take shots at some of the excitement is little surprise, considering that they helped spark the fire that practically consumed the Internet group.

CIBC Oppenheimer

analyst Henry Blodget slapped a

$400 price target on Amazon on Dec. 16, and it took just three weeks to reach that 12-month goal (pre-split). The same phenomenon happened with

eBay

(EBAY) - Get Report

when DLJ, an underwriter for the company, initiated coverage with a $100, 12-month target. It took just 10 days to surpass that goal. Those kinds of calls are almost becoming a self-fulfilling prophecy.

That's why this evening's batch of downgrades ought to be watched carefully.