Yahoo Faces $2.7 Billion Judgment in Mexico Over Listings
Yahoo! Inc. (YHOO) faces a $2.7 billion non- final judgment that has been entered against the company in a lawsuit in a Mexican court related to a Yellow Pages listing service.
The litigation was brought against the company in the 49th Civil Court of the Federal District of Mexico City by Worldwide Directories SA and Ideas Interactivas SA, Sunnyvale, California- based Yahoo said yesterday in a statement.
“The claims are without merit,” Yahoo said in the statement. The plaintiffs alleged “breach of contract, breach of promise and lost profits,” Yahoo said.
Yahoo has a market value of $22.2 billion, and the company had cash and short term investments of $8.41 billion as of Sept. 30, according to data compiled by Bloomberg. The verdict probably represents more money than Mexico’s Internet advertising industry has generated thus far, said Brian Wieser, an analyst at Pivotal Research Group LLC in New York.
The amount is “incredible in the sense of not being credible as a likely outcome,” Wieser said in an interview.
Sara Gorman, a spokeswoman for Yahoo, declined to comment on the judgment. A person who answered the phone at the court in Mexico City said the office would be closed until Dec. 3.
Shares of Yahoo declined as much as 1.8 percent to $18.44 in extended trading yesterday. The stock fell less than 1 percent to close at $18.77 in New York. Yahoo’s shares have gained 16 percent this year.
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