December 3, 2012 – A court in Mexico has assessed Yahoo will damages totaling $2.7 billion in a disputed contract with the Internet giant’s former partners on a business of directories in Mexico.
On Friday, Yahoo announced the judgment saying it believes the claims against them had no merit and all appeals would be vigorously pursued.
The Internet company said they had been sued by Ideas Interactivas and Worldwide Directories. In the beginning of the 2000s, the company produced a digital and printed phone book called Yahoo Paginas Utiles, in Mexico.
The two companies from Mexico alleged a breach of contract and promise along with lost profits from many contracts that had been related to the service of yellow pages listings. The 49th civil court in Mexico City mad the ruling.
Beyond the statement that was released by Yahoo, the company declined any further comment. Ideas Interactivas and Worldwide Directories were both unavailable for comment about the court’s decision. Document in courts that were related to the case were also unavailable. Yahoo did not make any mention of the case it is most recent filings, which it is required to as it is considered an outstanding legal risk.
In trading after hours on Friday, the stock for Yahoo dropped 1.6% after the announcement became public. If the ruling is upheld, it will mean an early blow to the new CEO at Yahoo Marissa Mayer’s attempts at turning around the struggling Internet company.
Many investors like Mayer and her plans for mobile-based refocusing of its portfolio of online services and websites For the most recent third quarter, revenues at Yahoo increased only 2% to finish at $1.09 billion. Mayer was given the CEO reins in July and became the fourth CEO of the company in just five years, following a long stint working for Google.
Only days after Mayer was appointed, Yahoo settled a lawsuit with Facebook over patents, where the two internet giants agreed to license one another’s patents.