Yahoo 2001 Annual Report Download - page 30

Net revenues and net income of Yahoo! and the acquired companies, prior to their acquisitions by
Yahoo!, are as follows (in thousands):
Years Ended December 31, 2001 2000 1999
Net revenues:
Yahoo! $717,422 $1,104,921 $543,732
broadcast.com —— 28,748
GeoCities —— 12,984
eGroups —5,257 3,178
Others —— 3,144
$717,422 $1,110,178 $591,786
Net income (loss):
Yahoo! $ (92,788) $ 93,156 $ 86,766
broadcast.com —— (7,617)
GeoCities —— (17,249)
eGroups —(22,380) (13,322)
Others —— (767)
$ (92,788) $ 70,776 $ 47,811
Note 6. Joint Ventures
Yahoo! Japan. During April 1996, the Company signed a joint venture agreement with SOFTBANK whereby
Yahoo Japan Corporation (“Yahoo! Japan”) was formed to establish and manage in Japan a Japanese ver-
sion of the Yahoo! Internet Guide, develop related Japanese online navigational services, and conduct other
related business. The investment in Yahoo! Japan is being accounted for using the equity method. As of
December 31, 2001, the carr ying value of the investment was $79.4 million and is recorded in other
assets. The fair value of the Company’s 34% ownership in Yahoo! Japan, based on the quoted trading price,
was approximately $1.2 billion as of December 31, 2001.
During 2001 and 2000, Yahoo! Japan acquired the Company’s equity interests in certain entities in
Japan for total consideration of $8.9 million and $56.3 million, respectively. The 2001 acquisition was
paid in cash and the 2000 acquisition was paid in shares of Yahoo! Japan Common Stock. As a result of
the 2000 acquisition, the Company increased its investment in Yahoo! Japan, which resulted in approxi-
mately $41 million of goodwill to be amortized over seven years. See Note 1 – “Recent Accounting
Pronouncements” for the effect of goodwill amortization in future periods. During the year ended December
31, 2001 and 2000, the Company recorded gains in other income of approximately $5.2 million and $41
million, respectively, from these transactions.
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During the year ended December 31, 2001, the results of Yahoo! Japan became significant to the over-
all results of the Company. The Company records its share of the results of Yahoo! Japan one quarter in
arrears within other income (loss), net. The following table presents Yahoo! Japan’s condensed financial
information, as derived from the Yahoo! Japan financial statements for the twelve months ended September
30, 2001 (in thousands):
2001
Operating data:
Net revenues $165,206
Gross profit 146,707
Income from operations 59,731
Net income 34,258
Balance sheet data:
Current assets $ 83,832
Noncurrent assets 123,202
Current liabilities 48,645
Noncurrent liabilities 18,142
There were no differences between United States and Japanese generally accepted accounting principles
that materially impacted the amounts reflected in the Company’s financial statements.
Yahoo! Europe. On November 1, 1996, the Company signed a joint venture agreement with a subsidiary
of SOFTBANK whereby separate companies were formed in Germany, the United Kingdom, and France
(“Yahoo! Europe”) to establish and manage versions of the Yahoo! Internet Guide for those countries,
develop related online navigational services, and conduct other related business. The parties have
invested a total of $6.0 million in proportion to their respective equity interests as of December 31, 2001.
The Company has a majority share of approximately 70% in each of the Yahoo! Europe entities, and there-
fore, has consolidated their financial results.
Yahoo! Korea. During August 1997, the Company signed a joint venture agreement with SOFTBANK and
other SOFTBANK affiliated companies whereby Yahoo! Korea was formed to develop and operate a Korean
version of the Yahoo! Internet Guide, develop related Korean online navigational services, and conduct
other related business. The parties originally invested a total of $1.0 million in proportion to their respec-
tive equity interests. During March 2000, the Company invested an additional $61 million in Yahoo! Korea.
As a result, the Company recorded goodwill of $20.2 million, which is being amortized over seven years.
See Note 1 – “Recent Accounting Pronouncements” for the effect of goodwill amortization in future peri-
ods. The Company has a majority share of approximately 67% in the joint venture, and therefore, has con-
solidated its financial results.
Note 7. Restructuring Costs
In April and December 2001, the Company announced restructuring programs to balance its investment
in growth areas with the desire to modify its near-term business plan to reflect the current economic and
capital market slowdown. These restructuring programs included worldwide workforce reductions, con-