DivX Sues Yahoo

San Diego-based DivX said Thursday that it has filed a lawsuit against Yahoo! for breach of contract, after Yahoo notified the firm that it intends to breach its two-year advertising services agreement with DivX. DivX said that Yahoo has informed the firm that it will discontinue making payments required under an agreement with the firm. As a result of the change, DivX also said it has made a revision to its revenue and earnings estimate for the year, reducing its estimated revenue range from $90 to $92M, down from an estimate $95 to $97M. The lawsuit was filed in the California Superior Court in Santa Clara County.