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There are many things that have people scratching their heads about Yahoo’s $2.7 billion loss in a Mexican court to a little-known telephone-directories company.But the biggest one: How on earth could the market for a Mexican Yellow Pages possibly be worth billions of dollars?
To recap: Carlos Bazan-Canabal, the founder of Worldwide Directories, sued Yahoo after a deal to produce print and online telephone directores in Mexico fell through. He won a $2.7 billion judgment in a Mexican court for breach of contract and other grounds.
We still haven’t seen the text of the judgment, so we have to guess how Bazan-Canabal justified the $2.7 billion damages claim. A new report that Bazan-Canabal is willing to settle with Yahoo has a hint.
Reportedly, Yahoo and Worldwide Directories had reached an agreement to extend their partnership beyond Mexico into Puerto Rico, Central America, Australia, and Japan, according to Reuters.
A global Yellow Pages franchise—especially one not laden with debt like existing players—might reasonably be seen as pretty valuable. While the telephone-directory business is under assault by the Internet, like a lot of other forms of advertising, it still throws off a lot of cash from small businesses that lack other advertising options.