[Bug 389322] Re: Yahoo server authentication changed: Pidgin =<2.5.6 will not connect to Yahoo! servers.

[Lonnie]

Now that's the solution for Ubuntu 9.04!

Do what JamesIsIn suggested. Follow the instructions at:
http://www.pidgin.im/download/ubuntu/

This worked for me, and I like it better than other solutions mentioned.

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Yahoo server authentication changed: Pidgin =<2.5.6 will not connect to Yahoo! servers.
https://bugs.launchpad.net/bugs/389322
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