The Battle Road Tech Index™ fell 0.5 percent for the week ended July 31, 2009, closing at 1398. For the week, 13 of the 25 Index components were in negative territory. Year-to-date, the index is up 39.8 percent, having started at a value of 1000.

Stocks for the most part consolidated gains achieved in the last two weeks, primarily in the wake of renewed hopes for better results in the year’s second half.

SAP (NYSE: SAP, $47.25) shares rose 4.7 percent after its Q2 earnings report this past week, as the company raised its operating margin guidance for the year. Highly profitable maintenance revenue, as well as tight cost controls, are keeping SAP earnings at reasonable levels, despite license sales dropping by 40 percent. The company has been particularly vulnerable to the recession, as close to 50 percent of its revenue comes from cyclical manufacturing companies.

Netflix (NASDAQ: NFLX, $43.94) rose by 4.1 percent for the week, regaining some of the 10 percent loss that it absorbed following its Q2 earnings release last Thursday (the 23rd), when the company outlined its guidance for the rest of 2009.

Yahoo! (NASDAQ:YHOO, $14.32) shares fell 18.1 percent this week. The drop came on the heels of its partnership announcement with Microsoft (NASDAQ: MSFT, $23.52), after 18 months of rampant rumors and speculation. Microsoft’s Bing search technology will replace Yahoo!’s within its search engine. Additionally, Microsoft will pay a high percentage of Yahoo!’s traffic acquisition costs (TAC). Yahoo! and Microsoft’s search advertising technology will be managed through Microsoft’s platform, and Yahoo!’s sales force will take the lead for both companies.

Investors saw the announcement as a setback for Yahoo!, as the company did not receive an upfront payment for allowing Microsoft to take over its search technology. Yahoo! will improve its profitability and cash flow as a result of the deal, since Microsoft will pay 88 percent of its TAC, and provide all of the necessary search technology, leaving Yahoo! to invest in other areas. This will allow Yahoo! to focus more on its media portals (Sports, Finance, News) and display advertising. Final approval of the partnership by regulators will likely take place in early 2010, and implementation will take an additional 24 months.

Akamai (NASDAQ: AKAM, $16.44) shares fell by 22.2 percent for the week, following its Q2 earnings release on Wednesday July 29, as the company narrowly missed revenue expectations. The shortfall stemmed from declining prices in media delivery, seasonality, and tight tech budgets. Akamai did, however, generate $105 million in cash from operations for the quarter, and the company’s initiatives outside of traditional content delivery continue to gain momentum.