The online travel booking business is not going to survive an economic downturn unscathed. That’s not a surprising statement, but confirmation of those sentiments yesterday from Expedia (EXPE) has the Street scurrying to revalue the online travel stocks.

As I noted in a post yesterday, Expedia observed on its post-earnings conference call that the softness the company had been seeing in the U.S. and the U.K. earlier in the year has now extended to “nearly all” geographies and all key product areas, including air, hotels and car rentals. The company indicated that transactions dropped off during the week Lehman went bankrupt, and have not rebounded much since.

This morning, several analysts cut ratings on the stock.

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Eight months ago, Yahoo! CEO Jerry Yang had a chance to sell his company to Microsoft for $43 billion. He refused. Now Yahoo’s (YHOO) market value stands at $18 billion. This raises a question: Why is Jerry Yang still running this company? “Nobody knows this company better than Jerry Yang,” Yahoo Chairman Roy Bostock says. “He put in place a strategic plan in 2007 and under extraordinary circumstances has been executing well against it. Jerry is the right person to continue to lead Yahoo.” Bostock says the company’s board has no regrets about the way Yang handled the Microsoft (MSFT) offer. “We analyzed the offer eight ways to Sunday, with advisers from Goldman Sachs and Lehman, and we determined that the initial offer of $31 per share significantly undervalued the company,” he says. “Not one of our investors encouraged us or suggested we should sell the company at $31 per share. Not a single investor.” He adds that Yahoo was willing to sell at a higher price, and that Microsoft, not Yahoo, walked away from the deal (as you’d expect, Microsoft blames Yahoo).

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Today’s dispatches from the land of the sun reflect caution and opportunity as regards the solar energy technology business. Analyst Gordon L. Johnson with Hapoalim Securities writes in an initiation-of-coverage report on the solar stocks that the credit crunch could hurt solar panel demand because installation of panels is funded up to 70 percent by debt. Johnson’s report, titled “Dancing in the Dark,” specifically recommends an “Underperform” rating on Suntech Power Holdings (STP), with a price target of $16.

Conversely, Lehman–I mean, Barclay’s Capital–research analyst Vishal Shah writes in a note today that he is lowering his estimates for First Solar (FSLR), dropping his 2008 profit per share estimate from $3.78 to $3.60, and from $7.50 to $6 in 2009, and from $11 to $9 in 2010, given reduced expectations for foreign exchange benefit thanks to a “deteriorating Eurozone outlook.”

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Something funny is going on today with Photon Dynamics (PHTN).

The company, which is an equipment supplier to the flat-panel display business, has an agreement in place to be acquired by Orbotech (ORBK) for $15.60 a share in cash. In fact, on Friday the company announced that its holders had approved the deal. So riddle me this: Why is the stock trading like something about the deal has gone very wrong? PHTN is down $2.34, or 15.5 percent, to $12.74. Orbotech, meanwhile, is up 5 cents, at $10.52.

I’ve left a message for the company, and will left you know if/when I hear from them.

Update: So, now I’m wondering if the completion of the deal has been affected by the issues at Lehman, which has been Orbotech’s financial adviser on the transaction. The deal, which was for about $290 million, was to be financed by a combination of internal and external funds.

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Douglas Anmuth, Internet analyst at Lehman, this morning trimmed his price target and EPS estimates for Google (GOOG) to reflect the strengthening of the dollar against the Euro and other currencies. Anmuth trimmed his 2008 EPS estimate to $19.21 from $19.46; for 2009, he goes to $22.41, from $23.52. He cut his price target to $600 from $620. However, Anmuth maintains his Overweight rating on the shares.

Anmuth says consensus numbers could come down further, ahead of Q3 results; on the other hand, he says the stock in the low $400s “should prove to be a compelling entry point.” According to Anmuth, “GOOG still appears better insulated” to macro softness than other in online advertising; it continues to gain market share “and should benefit from new search improvements and tighter cost controls.”

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As far as I can tell, the sun is operating normally.

But you might think otherwise, judging from this week’s action in solar stocks. The sector, which suffered considerable losses yesterday, today went into freefall, with many names in the sector suffering losses of more than 10 percent. Exactly why investors decided to bail on the stocks today is unclear, but there are a number of factors that appear to be contributing to the current solar scare.

Lehman analyst Vishal Shah wrote a note on the solar sector that, in general, was quite bullish and, in fact, repeated his recommendations on First Solar (FSLR), SunPower (SPWR), Suntech (STP) and JA Solar (JASO). But Shah also noted that most solar companies have provided “somewhat aggressive guidance” for 2009 on the assumption that poly supply would become readily available from the spot market or silicon partners.

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The freefall in memory chip prices continues unabated.

In a research note this morning, Lehman’s Korea-based chip analyst, C.W. Chung, said that DRAM contract prices in the first half of September are set to decline another 10 percent, following a 10 percent drop in the second half of August. And Chung sees a further fall in the second half of September.

Chung says PC makers recently have been lowering their outlook for the second half, effectively reduced DRAM demand. He also says that those companies now have greater negotiating power to push DRAM prices lower.

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Trading began yesterday on a when-issued basis on the four IAC/Interactive (IACI) spinoff companies, as well as the new post reverse-split, post-spin shares of IAC. With relatively thin dealings, volatility in the shares is high. In a research note this morning, Lehman analyst Douglas Anmuth asserts that most of the pieces are trading significantly below their fair value:

HSN (HSNIV) today is up 95 cents, or 8.7 percent, to $11.85. Anmuth puts the value of the company at $15.45 a share. Implied market cap at current price based on 57.2 million shares out is $677.8 million.

Interval Leisure Group (IILGV) is down 20 cents, or 1.5 percent, to $13. He thinks it is worth $12.28 a share. Implied market cap based on 57.2 million shares out is $743.6 million.

Ticketmaster (TKTMV) is down 38 cents, or 1.6 percent, to $23.33. Anmuth puts its fair value at $33.12 a share. Implied market cap based on 57.2 million shares out is $1.33 billion.

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As sales of Apple 3G iPhones continue to grow, there are also increasing reports of trouble with 3G reception on the devices.

Certainly, demand is robust. Lehman’s Ben Reitzes today writes in a research note that “checks indicate” Apple (AAPL) iPhone demand in the fiscal fourth quarter ending September could top his current estimate of 3.8 million units. And he adds that this “bodes well for cash flow,” and for “an enhanced halo effect for Macs.”

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UBS analyst Maynard Um today launched coverage of the PC sector, setting a Buy rating on Apple (AAPL) and Neutral ratings on Dell (DELL) and Hewlett-Packard (HPQ).

Um takes over coverage of the stocks from Ben Reitzes, who now covers the sector for Lehman. Um sees 2008 PC global units growing 13 percent, propelled by strong notebook growth and strength in emerging markets. That said, Um reports that his near-term bias on the PC hardware market is “neutral, largely reflecting concerns regarding slowing GDP and consumer/enterprise spending.” While he sees healthy unit growth, he also says that competition, mix shift and technological advances will drive down average prices. He sees industry-wide revenue grow next year at nine percent.

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