Mexico Yahoo plaintiffs open to settlement
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damages in the suit that had not yet been calculated. "This potentially could go up to over $3.5 billion," said
Bazan-Canabal, a former employee of Yahoo de Mexico. Yahoo believes it has "numerous" grounds to appeal,
including both errors in procedure and in application of law, a person familiar with the matter told Reuters.
Yahoo was dismissive of any suggestion of settling. "We're not going to comment on our legal strategy, beyond the fact that we believe the claims are without merit and will vigorously pursue an appeal," a company spokeswoman said. A JPMorgan analyst said the judgment, if sustained, would cost the company an estimated 40 percent of its 2012 cash balance, as projected by the bank. Despite the court's judgment, the ruling noted that Yahoo's objections had been "partially well founded."
Bazan-Canabal said the dispute centered on agreements signed between Yahoo de Mexico and Ideas Interactivas between 2002 and 2004 over a venture for an online business search function "Yahoo! Paginas Utiles" as well as printed volumes. Yahoo Inc. also entered into agreements with the Mexican company in those years, the court documents showed. After initial success with the yellow pages search project, the two sides agreed to extend the model to other parts of the world including Puerto Rico, Central America, Australia and
Japan, Bazan-Canabal said. But Yahoo in 2005 notified Ideas Interactivas it was terminating the deal, he added.
The joint agreement had been due to last until 2009, with options to extend it into 2011, he said. Breaking the deal caused Ideas Interactivas to go bankrupt, Bazan-Canabal said. "We weren't able to update listings and so forth, and that brought as a consequence us being in default with our advertisers," he added, noting that Ideas Interactivas had more than 300 employees in Mexico in 2004. The ruling said the damages awarded to the plaintiffs include a $2.4 billion sum related to alleged non-compliance with agreements, covenants and non-disclosure agreements or confidentiality agreements linked to the joint expansion plans. It also orders the return of the original database owned by Ideas Interactivas and Worldwide Directories, which Bazan-Canabal said was set up as a holding company for the former. The ruling also says Yahoo de Mexico filed a counterclaim