Court Orders Yahoo To Pay $2.7 Billion
Yahoo has been ordered by a Mexican court to pay $2.7 billion in a suit brought by Worldwide Directories and Ideas Interactivas, who allege that Yahoo has breached contract related to a yellow pages listings service, and that they have lost profits as a result.
The company is making it clear that the judgment is not final, and that it believes the plaintiff’s claims are without merit.
Yahoo issued the following statement late on Friday:
Yahoo! Inc. (NASDAQ: YHOO) today reported that the 49th Civil Court of the Federal District of Mexico City has entered a non-final judgment of U.S. $2.7 billion against Yahoo! Inc. and Yahoo de Mexico, S.A. de C.V. in a lawsuit brought by plaintiffs Worldwide Directories S.A. de C.V. and Ideas Interactivas, S.A. de C.V. Yahoo! believes the plaintiffs’ claims are without merit and will vigorously pursue all appeals. The plaintiffs alleged claims of breach of contract, breach of promise, and lost profits arising from contracts related to a yellow pages listings service.
Little more is known about the case, but TechCrunch provides some background about the companies’ relationship, which began nearly a decade ago:
Yahoo de Mexico struck a deal with Ideas Interactivas that was announced in 2003 to create “Yahoo! Páginas Útiles” which would help people find contact info for local businesses. As of now, though, the www.paginasutiles.com.mx domain is parked and doesn’t offer any Yahoo content.
The idea was to augment its online local business search with printed book. Yahoo hoped that the two-pronged strategy would let it compete with Google. The books would include maps, business and landmark listings, and a catalogue of offers and discounts. There would be flexible, low-cost advertising options in Yahoo! Páginas Útiles, which was slated for an initial circulation of 800,000 free copies followed by a second print run of 1.7 million units according to a April 2003 article from Mexican website Noticias Dot.
Yahoo’s revenue for its last quarter was just $1.2 billion, so, this is certainly a substantial amount of money for the company.