The Battle Road Tech Index™ dropped 2.4 percent for the week ended July 2, 2009, closing at 1276. For the week, 22 of the 25 Index components were in negative territory. Year-to-date, the index is up 27.6 percent, having started at a value of 1000.

The following companies were notable movers for the week:

Intel (NASDAQ: INTC, $16.72) rose 2.6 percent on the week. Analysts are expecting solid results from the chip manufacturer when it reports second quarter earnings on July 14, though forecasts have been mixed for the broader chip sector. Results will likely depend on the size of inventories and the strength of holiday buildup. Intel also announced a technology partnership last week with Nokia (NYSE: NOK, $14.54) that could potentially give the company a solid entrance into the mobile market, though no details have been released as to the specific product or timing of the launch.

Shares of Yahoo! (NASDAQ: YHOO, $14.99) were down 4.8 percent this week. The main story for the past couple weeks has been the launch of Microsoft’s Bing, seen as the most credible threat to Yahoo!’s position as the number two search engine. At this time it is unclear if Bing is merely a curiosity, with its share of search declining as users return to more traditional search engines after testing Bing, or instead a strong competitor to Google and Yahoo! that will become the third leg of a search engine troika. If Yahoo! does not address this threat, then it stands to lose search advertising dollars.

Shares of Amazon.com (NASDAQ: AMZN, $79.32) were down 5.4 percent for the week, as controversy continues to mount over whether the company will be forced to collect sales tax on merchandise sold in states in which it does not have a physical presence. In the last few weeks, Amazon has severed ties to affiliated companies that reside in Rhode Island, North Carolina and Hawaii. Legislators in those states are in the process of forcing web merchants like Amazon.com to collect taxes that would be turned over to the states in which the merchandise was purchased. Such a move on the part of state governments would assist in collecting badly needed revenue. It would also help to level the playing field for Amazon’s brick and mortar competitors like Borders (NYSE: BGP, $3.41) and Barnes & Noble (NYSE: BKS, $19.69), whose books and other merchandise are marked up at the check out counter by state tax. The next flash point may be California, which continues to struggle with burgeoning deficits. It is conceivable that the issue may go to the US Supreme Court, where attorneys will debate the legal, ethical and moral dimensions of conducting commerce in cyberspace.
eBay (NASDAQ: EBAY, $16.34), was down 5.8 percent in this holiday-shortened week. Announced in April, the company’s plan to spin out the Voice over IP service Skype has hit a couple of potential roadblocks. The company is embroiled in legal action with some of the founders of Skype over a breach in the licensing agreement. Additionally, the Swedish government is going to levy fees on Skype, as it is a communications services company that generates revenue in Sweden. The planned IPO of Skype is slated to occur in 2010 and may net the company as much as $2 billion.