SAN FRANCISCO -- Will weakness in Yahoo! (YHOO) be a precursor for a post-earnings selloff in the Internet sector? If recent history is any indication, it could be the start of a move to the downside.

Yahoo! has been a drag on Internet stocks today in advance of its earnings. It was recently trading down 6 3/16, or 3.5%, at 168 15/16. Price action is similar to what has occurred in previous quarters despite Yahoo! besting earnings estimates. Yahoo! is expected to post earnings of 8 cents a share after the close, with revenue of more than $100 million.

In Lockstep
Yahoo! vs. TheStreet.com Internet Sector index

Source: BigCharts

TheStreet.com Internet Sector

index, which includes Yahoo!, has shared many ups and downs with Yahoo! before and after earnings reports. When Yahoo! reported fourth-quarter earnings for 1998 on Jan. 12, the DOT was trading at a then all-time high of 616.09. By Jan. 22, it traded as low as 456.64. Yahoo! last reported earnings on April 7 and the DOT was around 700. It peaked at 824.20 a week later on April 13 before going into a freefall and reaching a low of 543.65 on April 20. It was recently down 15.13, or 2.3%, at 650.17.

Yahoo! got a bit of a lift midday today on news that

GeoCities

members had dropped a lawsuit brought against Yahoo!. The suit was in response to conditions that users had to agree to before they could edit or update their Yahoo-GeoCities Web pages. This comes after Yahoo! modified terms of the service.

Yahoo!'s earnings report is not the only tell for the market. Other Internet heavyweights will be reporting in upcoming weeks, including

Amazon.com

(AMZN) - Get Report

a week from today. And

America Online

(AOL)

is expected to report on July 21.

There are other reasons to think the Net sector will see some weakness following the earnings season. While second-quarter numbers are generally expected to be positive, the third quarter, which includes summer months when usage goes down, could be poor. But the Net sector already has gone through a huge correction the past couple of months. And with fall approaching, focus will shift to back-to-school buying of personal computers and increased usage of the Internet as the weather changes.