• by Wendy Davis , Staff Writer @wendyndavis, September 26, 2006

It looks like we haven't heard the last about trouble at Yahoo. Now, it's come to light that, for the first time in the company's 11-year history, it will all but shut down for the week between Christmas and New Year's.

Yahoo late last week sent a memo to employees telling them to take a vacation or unpaid time off between Dec. 25 and 31. "This makes good business sense and is common practice for many media and technology companies during what is traditionally a quiet work week," wrote the company in a memo that surfaced on the blog Valleywag. "The expectation is that nearly all U.S. Yahoos will participate in the office closure by utilizing their vacation time, personal floaters, or taking unpaid time off."

The memo came on the heels of the disclosure by CEO Terry Semel that ad growth had slowed in the financial services and auto categories. Semel said at a Goldman Sachs conference that Yahoo would still meet its forecast, but would fall at the low end of its projections.

Yahoo employees certainly can't be happy about being told to take a forced vacation. What's more, the news came the same week The Wall Street Journal reported that Yahoo was prepared to pay around $1 billion to purchase the social networking site Facebook.

It doesn't seem like a company that's panicked about finances would be throwing around that kind of money for a networking site--where the main asset is an audience that can pick up and leave any time it wishes.

Still, we can't help but wonder whether Semel is more concerned than he let on last week. Even if Yahoo meets its third quarter forecast, what about the fourth? Semel and other execs might already fear that ad sales are likely to be lackluster through the end of the year.