Yahoo! Threatened By $2.7 Billion Verdict In Mexico
The US company is told to compensate for ‘breach of contract’
Internet giant Yahoo has been ordered to pay $2.7 billion (£1.68bn) in damages by a court in Mexico, after it was found guilty of breach of contract related to a local yellow pages listing service.
The US company said it would appeal the decision.
Greetings from Mexico
Worldwide Directories SA and Ideas Interactivas SA sued Yahoo in the 49th Civil Court of the Federal District of Mexico City, accusing both the parent company and its Mexican arm of breach of contract and breach of promise. The plaintiffs have demanded $2.7 billion to compensate for lost profits arising from those contracts.
The two Mexican companies were involved in the production of a paper and digital phone book ‘Yahoo! Páginas Útiles’ almost a decade ago.
It is not clear when the lawsuit was filed, since documents from local courts in Mexico are not available for public access.
The judgement is non-final and will be contested by the company. “Yahoo! believes the plaintiffs’ claims are without merit and will vigorously pursue all appeals,” it said in a statement.
According to Bloomberg, Yahoo has a total market value of $22.2 billion, and the worth of its cash and short-term investments comes up to $8.41 billion. Shares in the company fell by 1.8 percent following the news on Friday.
Yahoo has been doing well in the past year, gaining 16 percent in value. Last month, it reported quarterly profit above $3bn (£1.9bn), most of which resulted from the sale of a stake in Chinese e-commerce giant Alibaba.
The lawsuit will test the skills of the CEO Marissa Mayer who had entered the job in July, becoming Yahoo’s fifth new boss in the space of a year. Mayer has recently announced reworked company strategy with increased focus on mobile, and hired Google’s exec Henrique de Castro as the COO.
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