Net earnings season opens Tuesday with a report from

Yahoo!

(YHOO)

, but expect

DoubleClick's

(DCLK)

numbers next week to be more telling for Net investors.

For now, investors seem resigned to the worst ahead of Yahoo!'s scheduled earnings release Tuesday. Concern about slowing growth in the online advertising market, articulated by a

Deutsche Banc Alex. Brown

downgrade Friday that spurred a 5% decline, has Yahoo! 53% off its 52-week high and near its 2000 low.

But Internet industry participants argue that Yahoo!'s numbers, for better or for worse, aren't likely to illuminate the health of the industry. Yahoo!, they point out, is a juggernaut whose results don't reliably measure industrywide strength. That means that as investors try to gauge whether non-Internet companies might fuel online ad spending the way buzz-hungry dot-coms once did, the details from ad specialist DoubleClick's release a week hence will fill in the broader picture.

Some Weakness

What's clear is that investors are already pessimistic about the second quarter. From Yahoo! on down, the overriding perception is that the venture-capitalized dot-com money that powered a remarkable first quarter in Internet advertising appears to have

petered out.

Not Quite Clicking
DoubleClick shares hard hit amid Net shakeout

Source: BigCharts

All ad-supported Internet companies have been affected by business-to-consumer companies' running out of cash, says Rosalind Resnick, CEO of opt-in email marketing firm

NetCreations

(NTCR)

. "The second quarter has been a challenging time for Internet companies," she says. As a result, Net companies have suffered a well-chronicled selloff, which has seen shares of Doubleclick, for instance, trading at barely a quarter of their January levels.

But so far, that hasn't translated into expectations of revenue shortfalls -- with the notable exception of

NBC Internet

(NBCI)

, which said in June that it

wouldn't meet expectations for both the second quarter and the year.

Diminished Expectations

Rather, it's about diminished expectations. That may seem odd in Yahoo!'s case: After all, the 29-analyst

First Call/Thomson Financial

consensus calls for the company to earn 10 cents a share in the quarter ended June 30, double a year ago. Revenue should jump some 90% to around $240 million or $250 million.

But in the past, Yahoo! hasn't been so much about meeting estimates as about beating them. As Andrea Williams Rice of Deutsche Banc Alex. Brown wrote Friday, "The days where we could comfortably expect our out-year revenue and EPS estimates were low by 30% to 50% are gone."

Long Six Months
Yahoo! shares cut in half amid Net selloff

Source: BigCharts

While Rice got a lot of attention for downgrading the stock to buy from strong buy, she was by no means the first analyst of late to wonder whether Yahoo! can grow fast enough to meet investor expectations. About a week back, for example, Holly Becker of

Lehman Brothers

started Yahoo! with a neutral rating, citing a slowdown in online advertising and the likely delay before traditional advertisers pick up the ball dropped by once-feverish dot-coms.

Advertising growth isn't the only concern that Yahoo! investors face. Paul Cook of the

Munder

(MNNAX) - Get Report

NetNet Fund, a Yahoo! shareholder, says a concern of his is whether Yahoo! will be able to make the transition from a branded PC-tethered Web portal into a wireless Internet portal. "Can Yahoo! actually build brand, or are they going to give up brand to 'My

AT&T

(T) - Get Report

'?" he asks. But Cook says he doesn't expect a definitive answer soon.

Good News, Bad News

More immediately, the question looms of how much Yahoo!'s performance will say about the rest of the advertising market.

As one buy-sider assesses the situation, a positive performance by Yahoo! says little about the state of online advertising, since Yahoo!, like

America Online

(AOL)

-- due to report on July 20 -- is separating itself from the pack in its ability to win ad dollars, so if Yahoo! and AOL grow at a decent pace, they may just be stealing market share from other properties rather than reflecting the health of the industry. "DoubleClick is more of an indicator of an overall feeling of Net advertising than Yahoo! is," says the investor, who works with a fund that has stock in Yahoo! but not DoubleClick.

On the other hand, if Yahoo! doesn't grow, that's bad news for everyone, the buy-sider says. "I know if Yahoo! is going to have a bad quarter, then DoubleClick is definitely going to have a bad quarter ... And the other little properties don't have a prayer."

NetCreations' Resnick agrees that DoubleClick, which sells ads and serves them on a variety of sites, is a better indicator than the single-medium Yahoo! "DoubleClick certainly sets the benchmark for everybody," she says.

For Cook, Yahoo! and DoubleClick, which his fund also holds, tell two different stories. "DoubleClick's numbers are probably more of a broad-based look at what smaller Web sites are going to be seeing across the board," he says. "Yahoo!'s numbers are more representative of a branded, top-tier, blue-chip, S&P 500 advertiser base."