The company statement is short and obviously vague:

"Plaintiffs and defendants hereby jointly stipulate to dismissal with prejudice of all claims made in this action based on a private settlement understanding among the parties."

In addition, Yahoo will also pay the families’ court costs. However, the entire case leaves the company with a huge black eye and a reminder that user privacy means nothing when it comes to getting a good grip on a new market.

The scandal started when Yahoo decided to comply with the Chinese authorities’ requests of handing over information on a specific Yahoo user, namely Chinese Journalist Shi Tao. The information consisted in email records, copies of messages, email addresses and user ID.

As it followed, Shi Tao was later on arrested and is now serving a 10 year prison sentence.

One week ago, Yahoo top chief Jerry Yang appeared in front of the Congress and tried to defend the actions of the company. Needless to say, the attempt was a complete failure. Tom Lantos, chairman of the House foreign affairs committee stated at the time:

"US-based multinational company practically led the police to his door. If you think our witnesses today are uncomfortable sitting in this climate-controlled room and accounting for their company’s spineless and irresponsible actions, imagine how life is for Shi Tao."