While a lot of focus has been put on Yahoo’s potentially ugly proxy fight with activist investor Carl Icahn–which could come to a head at its Aug. 1 annual meeting unless both sides figure out a truce before then–more attention should probably be paid to the Internet giant’s second quarter earnings report on July 22 at 5 pm ET/2 pm PT.

It is highly unlikely Yahoo (YHOO) leadership will blow the quarter. Or–more to the point–they simply cannot, especially given all the unending turmoil that has engulfed the company.

And, in fact, top execs have been working to avoid that possibility, sources inside the company said, including using well-known tricks of the trade, such as striking more short-term display deals at lower CPMs.

Or, better still, sources noted, by adding more sponsored links on its individual search query pages. Such a technique pollutes the overall consumer experience over the long-term, but also can give Yahoo a financial boost in the short-term.

Even Google (GOOG) does this, as it needs to, a practice that typically comes nears the end of a quarter.

But Yahoo’s search pages have been more packed in recent weeks with commercial links than regular ones.

For example, a side-by-side comparison of several random search terms–hotels, iPhone 3G, Kindle, blender–showed Yahoo typically had at least two and often three more sponsored links per page than Google.

Thus, sources said, such efforts will mean Yahoo is likely to meet the mid to lower range of Wall Street expectations for the second quarter in a few weeks.

But investors would be smarter to focus more on guidance for the rest of the year, which could spell a rougher road for the company and also the entire online advertising sector.

Along with its own internal turmoil, including many too many departures from its ad sales force–with more significant changes in that organization to come very soon, I am told–Yahoo is also facing a growing economic headwind, as the economy sours further and eventually eats into Web sector.

So much so that many inside the company said that internal revenue forecasts for the rest of the year are likely as not to be adjusted downward.

And, any sign of weak financial performance–even in the short term and more than any other factor Yahoo has had to face or will face–is probably the boom that it needs least of all to be lowered right now.

Please see this disclosure related to me and Google.