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Yahoo! Settles! With! Jailed! Chinese! Journos!

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Yahoo! has settled a lawsuit from two Chinese journalists who went to the slammer after the company coughed up their online info.

The terms of the settlement were not fully disclosed, as The Associated Press reports, though the web giant told us that it's "working to provide financial, humanitarian and legal support" to the journalists and their families.

The settlement comes just one week after a US Congressional hearing scrutinized Yahoo!'s role into the jailing of one journo, former financial writer Shi Tao. During the hearing, House Committee on Foreign Affairs chairman Tom Lantos insisted that Yahoo! CEO Jerry Yang and general counsel Michael Callahan offer an apology to Shi's mother, who sat behind them. Yang and Callahan then turned and bowed to the weeping mum. But that didn't stop Lantos from referring to the two execs as "moral pygmies."

Meanwhile, another lawmaker - representative Christopher Smith - specifically urged Yahoo! to make amends by settling the journalists' lawsuit, which the company had previously asked a federal court to dismiss.

In May, Shi Tao joined journalist Wang Xiaoning and Wang's wife, Yu Ling, in suing Yahoo! and its subsidiaries, accusing the company of "aiding and abetting" their imprisonment - and their torture. Both journalists are serving ten years in prison for backing democracy via the web, and both were sentenced after Yahoo! slipped their IP addresses and other online data to the Chinese government.

"After meeting with the families, it was clear to me what we had to do to make this right for them, for Yahoo, and for the future," reads a statement from Chief Executive Jerry Yang. "Yahoo was founded on the idea that the free exchange of information can fundamentally change how people lead their lives, conduct their business, and interact with their governments. We are committed to making sure our actions match our values around the world."

Was the settlement sparked by last week's hearings? Yahoo! won't say. But a Yahoo! source did tell us that the company's decision had nothing to with the legal merits of the case: "Following a meeting with the families of the jailed dissidents, Jerry Yang decided that – no matter how strong our legal case – it was the right thing to do to meet the humanitarian needs of these families."

Yahoo! also said that it's "working to create a separate humanitarian relief fund to provide support to other political dissidents and their families."

"We are committed to making sure our actions match our values around the world," said Yang. "That’s why we are also working to establish a Human Rights Fund to provide humanitarian and legal aid to dissidents who have been imprisoned for expressing their views online."

Yang also said that Yahoo! believes "in the transformative power of the Internet." That's why the company is "committed to working to support free expression and privacy around the world." The company didn't say whether this is a brand new belief. ®

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