Employees can use accrued vacation time, borrow against next year's time off, or take the days (December 24, 26, 27, 28 and 31) as unpaid. Christmas and New Year's remain paid holidays.

Staffers were notified about the policy last week by e-mail. Business partners, customers and vendors have also been informed.

"It's traditionally a very slow period anyway," said Kirsten Rankin, a Terra Lycos spokeswoman. "This will help us reduce facilities and payroll costs."

The company did not provide a estimate of the cost savings. Mandatory shutdowns are a common tool among manufacturers, but as the economy has slowed, several tech companies have adopted the practice.

In addition to reducing spending, Terra Lycos is taking steps to boost sales. For example, earlier this month, the company began offering real-time financial market data and analysis for about $200 per month.

Terra Lycos is also looking to acquisitions. The company, formed last year with the multi-billion dollar merger of Terra Networks and Lycos, is sitting on $2 billion in cash which could be used to snap-up undervalued Internet properties.

Last month, it bought Decompras.com, a shopping site aimed at Mexican and Latin American shoppers. Terra Lycos also recently redesigned its pages to make them sites more attractive to large advertisers.

Shares of TRLY edged up 0.36, or 4 percent, to 8.84 at midday. In the last 52 weeks, the issue has ranged from 4.5 to 17.625.

LATEST NEWS

SideJackers Gear Up for Online Shopping Season
Apple Joins AT&T/Verizon Food Fight
Web Video Play Joost Calls It Quits, Sold to Ad Firm
Many Enterprises Clueless on Mobile Data: Study
Murdoch's Google Block Play Risky, Analysts Say