Two helpful explanations and links for you:
"...Pitbull and Ke$ha come together again after Crazy Kids. The new song's called "Timber!" which used to mean "tree falling down". Their meaning of Timber is "getting down". (No surprises, actually. Do they ever write about anything else?)
" MUSICinsideU website
"It's a word that calls attention to something big happening right now, after a build-up. It's sort of an expression of a climax. Used as in "It's going down, I'm yelling timber," I think it means the party's starting and he's yelling LET"S GET IT ON. To "go down" is slang for To begin something big and dramatic. "The bank robbery is going down tonight," for example.
"Timber" in that song could also mean a sudden fall, a sudden fail. You know there's this big tree standing tall and all of sudden TIMBER it's falling and then it's dead." Best answer on yahoo! answers