* Yahoo vowed to pursue all appeals
* Details surrounding case still unclear
By Alexei Oreskovic
SAN FRANCISCO, Dec 3 Yahoo Inc believes
it has "numerous" grounds to appeal a Mexico City civil court's
$2.7 billion preliminary judgment against the company, including
both errors in procedure and in application of law, a person
familiar with the matter told Reuters on Monday.
The ruling in the case, which involves allegations of breach
of contract related to an online yellow pages listings service,
was made by the 49th Civil Court of the Federal District of
Mexico City, Yahoo said on Friday.
The case has perplexed many investors and tech-industry
observers since Yahoo disclosed it, particularly given the large
value of the "non-final" judgment.
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.
Bazan-Canabal operates a number of web sites. He said on one
that he joined Yahoo in 1999, adding that he is a former
executive of Yahoo Mexico, and that he helped to launch that
company. Yahoo could not immediately be reached for comment on
The details of the suit remained unclear on Monday.
Documents from local courts in Mexico are not available for
public consultation. Yahoo declined to comment.
Yahoo signed a commercial relationship with the two
companies in 2002, the person familiar with the matter said.
Yahoo terminated the relationship with the companies in 2009,
the person said.
Yahoo's appeal is expected to be heard by a panel of three
judges in a superior court in Mexico City, the person said who
was not authorized to speak publicly on the matter. It was not
clear when Yahoo might file its appeal.
Yahoo's most recent 10Q filing, which lists major ongoing
legal proceedings, makes no mention of the lawsuit.
"We believe the $2.7 billion figure appears high based on
the seemingly small size of Yahoo's business in Mexico, but we
believe shares could trade off modestly on the news," wrote JP
Morgan analyst Doug Anmuth in a note to investors following
"It's not clear how the Mexican court arrived at the $2.7
billion figure, but it would represent 40 percent of our
projected 2012 year-end cash balance for Yahoo," and equate to
about $2.30 per share, he wrote.
Shares of Yahoo closed Monday's regular session down 1.2
percent, or 22 cents, at $18.55.