MUMBAI: Online portal major Yahoo Inc. shut down its user-created chat rooms, which is part of its instant messenger service, after a Houston-based TV network showed the online service is being increasingly exploited by pedophiles to lure minors.

But a Yahoo spokeswoman maintained that the company closed down user-created sites to make enhancements and to ensure users were adhering to the site's terms of service.

According to media reports, In addition to shutting down all user-created chat rooms, Yahoo! has made unavailable the ability to create new chat rooms. Yahoo still lets users participate in online chat rooms that the company creates.

Media reports suggested that, Yahoo!'s action could be in response to a lawsuit -- seeking $10 million in damages -- was filed against it last month on behalf of a 12-year-old molestation victim and following a long campaign by watchdog groups to persuade Yahoo and other large Internet portals to purge their sites of child porn.

Following the television report which exposed pedophiles' presence in Yahoo's adult chat rooms, advertisers including PepsiCo, State Farm Insurance, Countrywide Mortgage and T-Mobile pulled out their ad placements from all Yahoo! chat rooms.

"We were completely unaware that our ads were associated with these chat rooms in any way. As soon as we were aware we worked with Yahoo! to immediately remove them," a spokesman for Pepsi-Cola has been quoted in media reports as saying.