Court Orders Yahoo To Pay Mexican Yellow Pages Companies $2.7 Billion In Mystery Case
from the billion-with-a-'b' dept
We've covered stories about the Yellow Pages and other directory companies in the past, as their business and general worth appears to be just short of evaporated, but this is a strange one. Frustratingly, there is a chasm worth of unknowns in this story, and not just by us here at Techdirt, but apparently by some of the players involved. Details are scant, due to the Mexican court system not having the kind of transparency of legal documents that we have here in the States. What we do know is that the result of a mystery lawsuit by two companies against Yahoo for "breach of contract, breach of promise, and lost profits arising from contracts related to a yellow pages listings service" is that Yahoo has been ordered to pay up $2.7 Billion (yes, with a "b") dollars. While the entire case represents something of a mystery to nearly everyone commenting on it, one commonality seems to be that everyone is confused.
If the ruling stands, Yahoo would be forced to part with nearly 36% of the $7.56 billion in cash it had as of September 30. It would be one of the first major challenges faced by CEO Marissa Mayer, who took the helm at Yahoo in July.No one really seems to know what the hell is going on here, except everyone commenting agrees that the judgment amount is insane. That said, I should also note that the judgment is not final and that Yahoo is promising to exhaust every appeal avenue afforded to them, which you'd expect given that there's over a third of their cash assets on the line. Adding to the mystery of the case is the fact that not only are court documents unavailable, but virtually nobody is commenting on the matter either.
J. P. Morgan analyst Doug Anmuth was similarly stumped. A research note he issued Monday focused on the ruling, around which he said there is "little clarity." It's unclear how the court came to the $2.7 billion figure for the judgment, but Anmuth said it "appears high based on the seemingly small size of Yahoo's business in Mexico."
The lawsuit was brought by Worldwide Directories S.A. de C.V. and Ideas Interactivas S.A. de C.V. against Yahoo and Yahoo de Mexico, Yahoo said.
The companies could not be reached for comment, although Carlos Bazan-Canabal, who describes himself as a founder of Worldwide Directories, told Reuters via email that he had contracted a U.S.-based law firm to handle the Yahoo case. He declined to comment further on the matter.For what it's worth, investors don't seem to think that the massive judgment is worth selling of Yahoo shares, as of yesterday, but with so few details it's hard to know what's going on. One thing is for certain, however: if judgments like these are validated, it would be a bright signal to tech companies throughout the world to avoid doing business in Mexico.