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Yahoo To Appeal $2.7B Judgment In Mexican Yellow Pages Contract Lawsuit
Yahoo is planning to appeal a $2.7 billion judgment against it in a lawsuit over a yellow pages listings service in Mexico. The company announced the judgment and its plan to appeal in a short news release this afternoon.
Details about the case are vague.
Yahoo’s statement says that a company called Worldwide Directories S.A. de C.V. and Ideas Interactivas, S.A. de C.V. sued Yahoo and Yahoo Mexico for breach of contract, breach of promise and lost profits related to contracts for a yellow pages listing service. Some reports say that Worldwide Directories is the parent company of Ideas Interactivas.
TechCrunch uncovered a 2003 Mexican news article that appears to describe an agreement between Yahoo Mexico and Ideas Interactivas to create an integrated web and print yellow pages-style product with a minimum first-run circulation of 800,000 copies, as well as an online version at www.paginasutiles.com.mx.
Yahoo says it “will vigorously pursue all appeals.” Here’s the company’s full statement:
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.
The $2.7 billion penalty is more than double Yahoo’s latest quarterly revenue of a little more than one billion dollars. This would be a huge financial hit if Yahoo can’t get the case reversed or the penalty reduced.