Mexican Court Rules Against Yahoo, Orders $2.7 Billion Pay Out
A Mexican court has ruled that Yahoo is liable for $2.7 billion in damages in a lawsuit over a contract that was disputed between the Internet giant and its former partners over a directories business.
An announcement was made on Friday by Yahoo regarding the judgment. Yahoo said it believed the claims filed against them were meritless and they would file all appeals that were granted them by the law.
The two companies that sued Yahoo were Ideas Interactivas and Worldwide Directories. At the start of 2000, the company began producing in Mexico both a printed and digital phone book titled Yahoo Paginas Utiles.
Both Mexican companies allege a breach of promise and contract as well as lost profits for the many lost contracts, which had been involved with the yellow pages listings directory service. A civil court in Mexico’s capital of Mexico City made the ruling.
Yahoo declined to make any further comments other than what was in the statement. Both Mexican companies also would not comment on the court’s decision. Court documents relating to the case were unavailable.
On Friday, in hours following the close of trading, Yahoo stock was down 1.6% following the statement released by the company. If the court ruling is upheld, it will be a direct blow to Marissa Mayer, the CEO of Yahoo and her attempt at turning the Internet giant around.
A large number of Yahoo investors have taken to Mayer since she was hired away from Google in July. They like her idea of mobile based refocusing the portfolio of websites and Yahoo’s online service.