Yahoo 2001 Annual Report Download - page 29

During 2001, 2000, and 1999, the Company recognized net revenues of approximately $9.3 million,
$6.8 million, and $6.8 million, respectively, on advertising and other arrangements with SOFTBANK.
Management believes that prices on these contracts were comparable to those given to other similarly
situated customers of the Company.
Note 5. Acquisitions
Purchase Combinations. The following table summarizes the acquisitions completed during 2001, 2000,
and 1999 that were accounted for under the purchase method of accounting (in millions):
In-Process Goodwill
Purchase Research and and Other
Price Development Intangibles
2001
Kimo.com $157.4 $ — $153.9
Other acquisitions $ 31.9 $ — $ 38.1
2000
VivaSmart, Inc. $8.9 $— $7.7
1999
Log-Me-On.com LLC $ 9.9 $9.8 $ 0.1
Yahoo! Canada $ 18.0 $ — $ 18.0
Innovative Systems Services Group, Inc. $ 14.1 $1.2 $ 12.1
In January 2001, the Company completed the acquisition of Kimo.com, a Taiwanese Internet communica-
tions and media company, through the issuance of approximately 2.2 million shares of Yahoo! Common
Stock for a total purchase price of $157.4 million. The purchase price was allocated to the assets acquired,
principally goodwill and other intangibles of $153.9 million, which are being amortized on a straight-line
basis between two to four years, and liabilities assumed based on their estimated fair values at the date
of acquisition. See Note 1 – “Recent Accounting Pronouncements” for the effect of goodwill amortization
in future periods. At December 31, 2001, the Company recorded $23.6 million of additional goodwill, which
was included in the above purchase price, as Kimo.com achieved certain performance-based milestones.
As of December 31, 2001, this amount was included in accrued expenses and other current liabilities and
was subsequently paid.
Log-Me-On, founded in 1998, was a development stage entity with limited operations, no revenues,
and four developers. As of the acquisition date, the Company’s efforts had been focused solely on devel-
oping a browser technology that was approximately 30% complete and there was no other technology
developed or in process at such date. Approximately $9.8 million of the purchase price was allocated to
in-process research and development. This in-process research and development had not reached tech-
nological feasibility and had no alternative future use.
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Results of operations for the entities acquired in 2001, accounted for under the purchase method of
accounting, for periods prior to the acquisition were not material to the Company on either an individual
or aggregate basis, and accordingly, pro forma results of operations have not been presented.
Poolings of Interests Combinations. There were no acquisitions during 2001 that were accounted for as
poolings of interests. The following table summarizes the acquisitions completed during 2000 and 1999
that were accounted for as poolings of interests (shares issued in thousands):
Shares
Acquisition Date Issued
eGroups, Inc. August 31, 2000 3,425
Arthas.com February 29, 2000 594
broadcast.com inc. July 20, 1999 57,294
Online Anywhere May 28, 1999 906
GeoCities May 28, 1999 43,281
Encompass, Inc. May 26, 1999 1,390
For the year ended December 31, 2001, acquisition-related charges totaled $4.8 million related to incre-
mental costs associated with the final settlement of a facilities lease termination related to the August
2000 acquisition of eGroups. For the year ended December 31, 2000, acquisition-related charges totaled
$22.8 million related to the acquisitions of Arthas.com and eGroups, which included contracts and facil-
ities termination expenses, write-offs of certain related fixed assets and leasehold improvements, pro-
fessional services, severance costs associated with the termination of certain employees with redundant
job functions, and various registration and filing fees. For 1999, acquisition-related charges for acquisi-
tions accounted for as poolings of interests totaled $77.1 million and included investment banking, finan-
cial and legal advisory services, severance, and contract termination costs related to the mergers. These
costs were primarily attributable to the GeoCities and broadcast.com acquisition-related charges of $55.0
million and $20.0 million, respectively. As of December 31, 2001, the acquisition costs related to these
transactions have been substantially paid.
The consolidated financial statements for the three years ended December 31, 2001 and the accom-
panying notes reflect the Company’s financial position and the results of operations as if the acquired
entities were wholly-owned subsidiaries of the Company since inception, with the exception of Arthas.com
whose historical operations were not material to the Company’s financial position, results of operations,
or cash flows.