SAN FRANCISCO -- Yahoo! (YHOO) remained the center of attention in the Internet sector today, as the Net bellwether gets set to report its second-quarter earnings after the close of trading this afternoon.

And while investors will certainly focus on what Yahoo! posts, of more immediate concern to them is how the stock performs ahead of its earnings after Tuesday's late weakness. Yahoo! was up more than 10 points at one time yesterday before closing 3 points lower, dropping sharply in the final hour of trading. Early on today, Yahoo! was down 3 5/8, or 2%, at 171 1/2.

Some of the losses could be attributed to profit-taking. Yahoo! typically ramps up ahead of earnings and beats estimates, but it still sees a selloff after its earnings release. That trend was described in a research note this morning from

PaineWebber

, which said that for the last three earnings periods, Yahoo!'s shares have peaked one or two days prior to the release. But in the four- to 14-day period following earnings, the stock fell 17.5% in the third quarter of 1998, 36.2% in the fourth quarter of 1998 and 21.5% in the first quarter of 1999, according to the note. Yahoo! is expected to post second-quarter earnings of 8 cents a share, according to

First Call

, though the whisper number is closer to 10 cents a share. Revenue is expected to come in over $100 million.

Losses in Yahoo! were contributing to the general weakness seen in the Internet sector early on.

TheStreet.com Internet Sector

index was down 5.27 to 659.97 in recent trading.

Elsewhere, shares of

Lycos

(LCOS)

were firmer after the Net portal said it had entered into an agreement with

RCN

(RCNC)

on a number of Internet-based initiatives, including the development of high-speed content to be deployed over RCN's fiber-optic network. Lycos was up 4, or 4%, at 107 13/16. RCN was up 7/8, or 2%, at 44 7/8.

barnesandnoble.com

(BNBN)

was trading higher after it launched an online music store, a further attempt by the company to take on

Amazon.com

(AMZN) - Get Report

. barnesandnoble.com was up 7/8, or 5%, at 18 1/8. Amazon.com was down 2 5/16, or 2%, at 124 9/16.

Online brokerages were weaker following a note today from

Credit Suisse First Boston

analyst Bill Burnham. Burnham reported that online trading volumes grew around 15% sequentially in the second quarter of 1999 vs. the 47% sequential growth seen in the first quarter. While that 15% growth is roughly in line with the average sequential growth of the past two to three years, Burnham said that because it is below the first quarter's rate and the 34% rate for the fourth quarter of 1998, he expects today's news to have a "near-term neutral to negative effect" on the sector.

Burnham also provides some positive words on

E*Trade

(EGRP)

in his report, saying he expects the company to log one of the strongest quarterly performances with respect to account and trade growth due to the continued success of its marketing campaign. E*Trade was down 13/16, or 2%, at 40 1/4 in early trading. Rival

Ameritrade

(AMTD) - Get Report

was down 1/2, or 1%, at 40 3/4. Credit Suisse First Boston has not done any underwriting for E*Trade.

On the IPO front,

Musicmaker.com

(HITS)

, a provider of customized music CD compilations over the Internet, debuts today. The 8.4 million-share offering was priced Tuesday night at 14. And while the IPO market has been hot of late, Musicmaker.com could be a sound indication of just how badly investors want new issues. Musicmaker.com had revenue of $74,028 in 1998 and $20,160 in the first quarter of 1999 (vs. $22,416 in the first quarter of 1998), when it lost $1.8 million. The company recently made a deal with

Virgin Express Holdings'

(VIRGY)

EMI

music division. The lead underwriter for the IPO is

Ferris Baker Watts

.