Yahoo announced yesterday that it had prevailed in an appeal of a $2.75 judgment in Mexico obtained by former joint venture partners. Those former partners, Worldwide Directories and Ideas Interactivas, sued Yahoo for breach of contract and damages.
The case arose from the termination of a contract between Yahoo de Mexico and Ideas Interactivas. In roughly 2002, the companies agreed to jointly produce online and print directories: “Yahoo! Paginas Utiles.” The project was initially successful and the parties sought to expand the deal to other countries and regions, including Central America, Australia and Japan.
In 2005, however, Yahoo decided to end the deal. The contract was supposed to run through 2009. As a result of the termination of the contract Ideas Interactivas said it was forced into bankruptcy.
The lower court (49th Civil Court of Mexico) entered a preliminary judgment in favor of plaintiffs for $2.75 billion. The judgment represented a substantial chunk of Yahoo’s cash-on-hand. It was also more than Yahoo’s Q4 revenue.