DivX sues Yahoo
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With Yahoo co-founder and CEO Jerry Yang on his way out the door, the company is also being sued by DivX for intentional breach of contract.
DivX says it’s had to revise its revenue and earnings estimates for the fiscal year ending December 31, 2008, “following notification from a major advertising customer, Yahoo!, Inc. that it intends to breach the two-year advertising services agreement announced in September 2007 between the two companies and discontinue making payments required under the agreement”.
The company has consequently has filed a lawsuit seeking damages from Yahoo! and specific performance under the agreement.
DivX will, “aggressively pursue legal action to ensure that Yahoo! honors its obligations under this agreement,” promises CEO Kevin Hell.
Says a DivX statement:
“The Company anticipates that its revenues for 2008 will range from $90 million to $92 million as compared to its previous estimates of $95 million to $97 million. In addition, the Company anticipates its non-GAAP EPS for 2008 will range from $0.49 to $0.51 as compared with its previous estimates of $0.58 to $0.60. Media and other distribution services are now expected to be 15% to 20% of total revenues for fiscal year 2008 as compared to the previously announced range of 15% to 25%.”
Absent further developments, “we believe this action by Yahoo! will impact the fourth quarter of 2008, as well as fiscal year 2009, since the Yahoo! agreement terminates by its terms on December 31, 2009,” states Dan Halvorson, executive vp and CFO.
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out the door – Yahoo’s Jerry Yang quits, November 18, 2008
DivX – DivX Revises 2008 Guidance; Files Lawsuit Against Yahoo! for Intentional Breach of Contract, November 17, 2008
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