DivX and Yahoo Settle Suit

Bruce V. Bigelow8/20/09

DivX (NASDAQ: DIVX), the San Diego video codec developer, says it has settled a lawsuit with Yahoo (NASDAQ: YHOO) over an advertising agreement that triggered some turmoil at DivX last fall. Terms were not disclosed, but DivX says the settlement will boost its third-quarter operating income by 29 cents per share. With about 32.8 million shares outstanding, that suggests a settlement of $9.5 million. DivX sued Yahoo in November, alleging the Internet search engine company had backed out of a two-year deal on toolbar distribution reached in September 2007.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788