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Prior to and during 2001, Yahoo! Japan acquired the
Note 7 RELATED PARTY TRANSACTIONS Company’s equity interests in certain entities in Japan for
At December 31, 2003, SOFTBANK Corp., including its total consideration of approximately $65 million, paid
consolidated affiliates (‘‘SOFTBANK’’), held approxi- partially in shares of Yahoo! Japan Common Stock and
mately four percent of the then outstanding Common partially in cash. As a result of the acquisition, the Com-
Stock of the Company. In addition, the Company has pany increased its investment in Yahoo! Japan, which
joint ventures with SOFTBANK in France, Germany, resulted in approximately $41 million of goodwill to be
Japan, Korea and the United Kingdom. A Managing Part- amortized over seven years. This amortization ceased upon
ner of a SOFTBANK affiliate is also a member of the the adoption of SFAS 142.
Company’s Board of Directors.
The Company also records its share of the results of
During 2001, 2002, and 2003, the Company recognized Yahoo! Japan one quarter in arrears within earnings in
revenues of approximately $9 million, $10 million, and equity interests. The following table presents Yahoo!
less than $1 million, respectively, on advertising and other Japan’s condensed financial information, as derived from
arrangements with SOFTBANK. Management believes the Yahoo! Japan financial statements for the twelve
that prices on these contracts were comparable to those months ended September 30, 2001, 2002 and 2003 (in
with other similarly situated customers of the Company. thousands):
The Company and other third parties are limited partners Years ended September 30,
in Softbank Capital Partners LP (‘‘Softbank Capital’’), a 2001 2002 2003
venture capital fund for which a Softbank affiliate is the
Operating data:
General Partner. The Company initially committed to a
Revenues $164,935 $297,787 $500,091
total investment of $30 million in the fund, and subse-
Gross profit $141,403 $246,137 $462,352
quently committed to invest an additional $6 million. To
Income from operations $ 59,731 $124,522 $262,393
date, the total investment by the Company in Softbank
Net income $ 34,258 $ 67,672 $145,720
Capital is approximately $34 million. Pursuant to the
Balance sheet data:
Partnership Agreement, the Company invested on the
Current assets $184,385 $316,584
same terms and on the same basis as all other limited
Noncurrent assets $ 97,552 $206,704
partners.
Current liabilities $ 75,949 $112,959
See Note 8 – ‘‘Joint Ventures’’ for further information Noncurrent liabilities $ 7,278 $ 15,795
related to transactions involving SOFTBANK and Yahoo!
There were no differences between United States and Jap-
Japan.
anese generally accepted accounting principles that materi-
Note 8 JOINT VENTURES ally impacted the amounts reflected in the Company’s
financial statements.
Yahoo! Japan. During April 1996, the Company signed a
joint venture agreement with SOFTBANK, which was Yahoo! Europe. On November 1, 1996, the Company signed
amended in September 1997, whereby Yahoo! Japan Cor- a joint venture agreement with a subsidiary of
poration (‘‘Yahoo! Japan’’) was formed. The Company has SOFTBANK whereby separate companies were formed in
a license agreement with Yahoo! Japan for specified uses of Germany, the United Kingdom, and France (collectively
the Yahoo! brand and business model, and recorded ‘‘Yahoo! Europe’’) to establish and manage versions of the
license revenues of approximately $5 million, $8 million, Yahoo! Internet Guide for those countries, develop related
$15 million for the years ended December 31, 2001, online navigational services, and conduct other related
2002 and 2003. The investment in Yahoo! Japan is being business. The parties have invested a total of $6 million
accounted for using the equity method. As of Decem- in proportion to their respective equity interests as of
ber 31, 2003, the carrying value of the investment was December 31, 2003. The Company has a majority share
approximately $153 million and is recorded in other of approximately 70 percent in each of the Yahoo! Europe
assets. The fair value of the Company’s 34 percent owner- entities, and therefore, has consolidated their financial
ship in Yahoo! Japan, based on the quoted trading price,
was approximately $8.5 billion as of December 31, 2003.
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