BoomTown is assembling all the popcorn and treats at All Things Digital HQ for Yahoo’s first-quarter earnings call later today, looking forward to hearing what CEO Carol Bartz will say about how she is turning around the Internet giant.

It is actually the 99-day mark since Bartz took over in January, which means I might also invite the Yahoo sacred cows over for festive cupcakes too.

For the more serious-minded, there should be news about more cost-cutting, including the possibility of additional layoffs, as well as questions on Yahoo’s talks with Microsoft (MSFT) about a search and advertising partnership.

Frankly, I am most excited to see what pistol-packing remark Bartz will make to those listening in about the Silicon Valley icon and its prospects.

She has turned out to be the Midwestern version of Oscar Wilde of the Internet when waxing poetic on Yahoo (YHOO), including the classic: “This is not a company that needs to be pulled apart and left for the chickens.”

Although, truth be told, Wall Street is expecting more chicken scratch than feed today from Yahoo.

Analysts are expecting $1.2 billion in revenue and profit of eight cents a share for the quarter, which are significant declines on both counts due to the company’s lackluster online display ad business.

In these tough economic times, investors will be looking at the steepness of the declines for clue of performance, as well as what is to come. Any upside surprise will be a big deal.

Here is a simple cheat sheet: Bunny Hill steep good, Black Diamond steep bad!

The earnings press release will come out at 1:20 p.m. PDT, after the market is closed, while the call starts at 2 p.m.

You can tune in here at Yahoo’s investor relations site if you want to listen to the call, as well as get the press release, but BoomTown will be liveblogging so you don’t have to!

A lot has been written about the need for drastic layoffs at Yahoo, including reports that the troubled company was preparing to fire from 3,000 to 3,500 of its 15,000 employees.

As dramatic as that figure is, according to numerous sources, it’s more likely that Yahoo will cut only half that, beginning sometime in mid-December.

That date could move up, of course, depending on how bad the economic outlook get for Yahoo, but it is not likely Yahoo will make any move in front of its earnings next Tuesday, October 21.

Why? Well, because what Yahoo’s top brass has already done is given its managers cost-cutting targets and not specific marching orders on laying off a certain number of people across the board.

And that’s even if the management consulting company that Yahoo has hired to look over the company’s operations, Bain & Co., recommends more.

In addition, the figures that top execs–such as SVPs Hilary Schneider and Ash Patel–have handed down to their minions is a process that includes considerable negotiating and maneuvering among and between various managers. So, nothing is set in stone.

Thus, how Yahoo (YHOO) under-bosses reach those goals and what gets lopped does not have to necessarily be employees.

For example, a manager could table a project in the search area or perhaps not expand features planned.

Of course, slashing employee costs is always the easiest way to show significant cuts, and it does send a definite message to investors that Yahoo realizes it must clean up its operations.

“But that’s hacking and we have to be more surgical,” said one exec involved in the process.

But look for more cuts in staff in certain areas, because people are its major cost, such as in Yahoo’s finance, human resources and general and administrative units.

Of course, if its economic situation continues to dim and its stock keeps up its downward slide, Yahoo could move to more dramatic staff cuts, which many feel it should do right away.

One note: If Yahoo manages to successfully complete its merger talks with Time Warner (TWX) over its AOL unit before the December cost-cutting moves go into effect, the company could hold off all cuts until the pair figure out their integration plans.

And then, I would expect, the really large-scale layoffs would begin.

OK, let’s say we give Jerry Yang a break today on the inevitable layoffs at Yahoo, as he announces fourth-quarter earnings that will surely be scrutinized like the entrails of sacrificial cows.

Did I say cows? Oops.

I know, I know.

I should be the very last one to use that particular metaphor.

That’s because I shamelessly conducted a 100-day vigil, after Yang perhaps unadvisedly declared last summer at his first public outing as newly named CEO that he would undertake a 100-day basement-to-attic look at the company. Even worse, he added that there were “no sacred cows” at Yahoo.

That’s all I needed, of course, and when little was done by the very last day of Yang’s self-inflicted schedule, I wrote:

So far though, in terms of truly dramatic change, it’s Cows: 99, Yang: 0.

“No massive cuts, no major management upheavals, no drastic shift in business, no game-changing purchases and no being acquired either.

“Then again, there’s still one more day to go!”

Well, it looks like a bit of that day has come for some at Yahoo, with the possibility of significant employee layoffs being greeted with hand-rubbing glee by some analysts (good reporting here by Henry Blodget at Silicon Alley Insider).

But, while layoffs probably should have come much, much sooner, the focus on them misses the real point, which is how much Yahoo will be cutting more drastically whole units where it has lagged or cannot win in, such as consumer search and search monetization.

Here, for example, Yahoo’s ceaseless efforts are still not enough, and it finds itself caught in the muddy middle between hard-charging Google and ready-to-spend-anything Microsoft.

It cannot win in this arena and needs to acknowledge that publicly, even as its top managers did privately at an exec retreat in December, where “maintain share” was the uninspiring motto.

That lack of traction and not porky headcount is what has been depressing the stock, which remains in danger of slipping below $20 a share.

From there, things could quickly get out of control for Yahoo and perhaps spin it right into the hands of private equity wolves or others.

So, if I were doing the divining, I would not focus on sheer numbers of layoffs, but where and how Yahoo consolidates, since cutting for cutting’s sake seems like a road to ruin.

In addition, rather than bid up the layoff story, looking more closely at traffic, page views and where the all-important 500 million user metric is headed are all critical to piece together a more accurate prediction of what is to come at Yahoo.

For now, in any case, from all accounts I have heard from sources, the quarter is going to be solid, and the look forward also sunnier. While the comparisons from last year are much easier, Yahoo’s strong graphical ad sales force has been working it to garner just such results.

Good for them, given the headwind Yahoo troops have been facing of late.

But will it really matter?

Because no one, not even the can-do-no-wrong Google (oh, it can and does), will escape the impact in six months time if the recession meets even the less drastic predictions and the ad sector tanks.

In other words, it will be that and not a too-fat staff that could be the thing that really sends Yahoo down to the bottom of the ocean. But let’s be clear, in that regard, it won’t be the only one hitting an iceberg.

(If you want to read more on Internet stocks and the recession, see the most excellent second item in the Ahead of the Tape column by The Wall Street Journal’s Kevin Delaney.)

Please see this disclosure related to me and Google.

Sure, we’ve asked for the obligatory on-the-record interview with CEO Randy Falco (pictured here), who made the announcement of the layoffs. But while we’re waiting by the phone, we need to get busy.

Thus, to continue our quest to clarify the muddy-waters situation at the long-struggling Internet portal, we are going to decode the memo Falco sent out to AOL’s troops.

(Back in late August, we also translated a memo from Yahoo President Sue Decker about its reorganization of management.)

Here’s my take on Randy’s take:

Randy wrote: Dear AOL colleague,

Translation: Um, what was your name, again?

Randy wrote: Just over a year ago, AOL embarked on an incredibly complex and significant transformation as we fundamentally shifted our business model from a subscription-based ISP to an advertising-supported Web company.

Translation: Those where the days, my friend, we thought they’d never end, we’d sing and dance forever and a day. We lived the life we’d choose. We’d fight and never lose, for we were young and sure to have our way. Damn you, Steve Case!

Randy wrote: Today, I want to give you an update on where we are in this transition, and talk about further actions we’re taking and where we’re headed as a company.

Translation: Here’s a nice cardboard box! Fill it with your things, and pretend it’s just like Christmas! Curses to you, Bob Pittman!

Randy wrote: When I came to AOL, I knew we had to take several steps to complete our company’s transformation.

Translation: That smooth-talking Jeff Bewkes said it would be a walk in the park compared to selling ads for a dying television network. Fie on Myer Berlow’s bowl-making!

Randy wrote: We aggressively expanded our advertising capabilities, building on the strength of Advertising.com and our premium ad sales force. We acquired three leading-edge advertising companies–ADTECH, Third Screen Media and TACODA–and formed Platform-A. AOL now has one of the largest and most sophisticated ad networks in the world, and we’re well positioned to compete where the ad market is heading.

Translation: Let’s try hard not to give former CEO Jon Miller any credit whatsoever for the prescient move of buying Advertising.com, the site that has saved our collective bacon. That Kenny Lerer’s lucky he has Arianna to protect him!

Randy wrote: We rebuilt and revitalized our key products, programming channels and platforms. And unique visitors to AOL.com, News, Food, Money & Finance, TMZ, Moviefone, MapQuest and many other sites are up. Our products are once again creating buzz in the market. And to reach the widest audience possible across the Web, we’re unbundling our products and programming so users can take them along wherever they go online.

Translation: No walled garden? The kids like these newfangled widgets? Thank God for the trifecta of celebrity meltdowns–Paris Hilton, Lindsay Lohan and Britney Spears–for keeping TMZ in traffic! Now if I could only get Miles Gilburne in a room with Danny Bonaduce!

Randy wrote: Importantly, we’re taking the business global. We’re extending AOL’s reach into seven new countries this year while globalizing our product development efforts. By the end of next year, AOL will have a presence in 30 countries. That’s a remarkable achievement in a relatively short period of time.

Translation: Yes, I am sure the Chinese haven’t quite figured out that AOL now stands for An Old Lady (of the Web). Oh, you’ll get yours, David Colburn!

Randy wrote: We refocused the business around three core areas–Platform-A, Publishing and Access–and are now managing these as three distinct but related components.

Here’s why this is important. With Platform-A, we can offer advertisers the most advanced set of solutions across our extensive network of owned-and-operated sites and third-party sites. Publishing provides us the products, programming and platforms we need to sustain a healthy owned-and-operated network. And our Access business continues to be profitable, providing us cash flow to invest in other areas of the business, and it’s an important source of primary emails and page views.

Translation: I am fairly certain those annoying nerds at Google can’t just decimate us with their solar death rays in these arenas. Plus, what idiot is going to get into the access business? I’d like to give Matt Korn a busy signal!

Randy wrote: The last important piece in this transition is the realignment of our costs against these three businesses so we can operate as efficiently and effectively as possible. This is in many ways the most difficult step, but a necessary one.

Translation: Here it comes…

Randy wrote: As a part of this realignment, tomorrow we begin a reduction in force that will, over the next couple of months, affect a total of about 2,000 people out of our worldwide workforce of 10,000.

Translation: Ouch. That hurt. Well, you, not me.

Randy wrote: Everyone impacted by this reduction deserves our thanks and respect for their contributions to the company. We will aid these individuals in their transition to new opportunities as much as possible, most importantly with what we believe are generous severance packages.

Translation: Free AOL access for all! Oh, it is free! Well, freeeeeeeeeer!

Randy wrote: This realignment will allow us to increase investment in high-growth areas of the company–as an example, we added hundreds of people this year through acquisitions–while scaling back in areas with less growth potential or those that aren’t core to our business, as we did with the sale of Tegic.

Translation: This is worse than not being able to program Thursday night!

Randy wrote: So where is this taking AOL? Put simply, my vision for AOL is to build the largest and most sophisticated global advertising network while we grow the size and engagement of our worldwide audience.

We’re only a year and a month into our transformation, and the turnaround has been dramatic. We’re now in a position to win as an advertising-supported business. We have a bright future as a company if we can execute on this vision.

Translation: Maybe, oh, maybe Mark Zuckerberg will buy us with his lunch money!

Randy wrote: Randy

Translation: Mr. Burns. (You know Smithers, oops, Ron Grant wrote this, don’t you?)