Yahoo 2001 Annual Report Download - page 35

Note 12. Subsequent Event
HotJobs. In February 2002, the Company completed the acquisition of HotJobs.com, Ltd. (“HotJobs”), an
online recruiting company. HotJobs will become a part of the Company’s listings properties and is
expected to generate revenue for the Company primarily through listings and subscription fees for access
to HotJobs’ database.
The total estimated purchase price of approximately $439.1 million consisted of approximately
$191.8 million Yahoo! Common Stock, representing approximately 12 million shares, approximately
$206.6 million in cash consideration, approximately $33.7 million of stock options exchanged, and direct
transaction costs of approximately $7.0 million. The value of the common stock and stock options was
determined based on the average market price of the Company’s common stock over the 5-day period
before and after the terms of the exchange offer were finalized in February 2002.
The preliminary allocation of the purchase price to the assets acquired and liabilities assumed based
on the fair value of HotJobs is as follows (in millions):
Cash acquired $ 55.1
Other tangible assets acquired 45.6
Amortizable intangible assets 98.6
Goodwill 316.5
Liabilities (41.6)
Deferred income taxes (39.4)
Deferred compensation 4.3
Total $439.1
Amortizable intangible assets acquired have estimated useful lives as follows: Tradename, trademark, and
domain name — 7 years; Customer contracts — 5 to 7 years; Developed technology — 3 to 5 years. The
preliminary residual purchase price of $316.5 has been recorded as goodwill. Goodwill represents the
excess of the purchase price over the fair value of the net tangible and intangible assets acquired, and is
not expected to be deductible for tax purposes. In accordance with SFAS 142, goodwill will not be amor-
tized and will be tested for impairment at least annually.
For 2001, HotJobs had reported net revenues of $117.6 million and a net loss of $45.0 million.
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To the Board of Directors and Stockholders of Yahoo! Inc.:
In our opinion, the accompanying consolidated balance sheets and the related consolidated statements
of operations, cash flows and stockholders’ equity present fairly, in all material respects, the financial
position of Yahoo! Inc. and its subsidiaries at December 31, 2001 and 2000, and the results of their oper-
ations and their cash flows for each of the three years in the period ended December 31, 2001 in con-
formity with accounting principles generally accepted in the United States of America. These financial
statements are the responsibility of the Company’s management; our responsibility is to express an opin-
ion on these financial statements based on our audits. We conducted our audits of these statements in
accordance with auditing standards generally accepted in the United States of America, which require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the accounting principles used and sig-
nificant estimates made by management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
San Jose, California
January 16, 2002, except for Note 12
which is as of February 12, 2002
Report of independent accountants