Yahoo 2004 Annual Report Download - page 46

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Acquisitions
In the two years ended December 31, 2004, the aggregate purchase price for all acquisitions was approximately $2.9 bil-
lion of which $2.1 billion was allocated to goodwill, $557 million to amortizable intangibles and the residual to net
tangible assets.
Acquisitions completed in the last two years include the following:
• March 2003 – Inktomi, a provider of Web search and paid inclusion services for a total purchase price of
$290 million;
• October 2003 – Overture, a provider of commercial search services, including sponsored search services for a total
purchase price of $1,732 million;
• January 2004 – 3721, a Hong Kong-based software development company; focused on keyword search technology
for a total purchase price of $74 million;
• April 2004 – Kelkoo, a European online comparison shopping service for a total purchase price of $571 million;
• October 2004 – Musicmatch, a provider of personalized music software and services for a total purchase price of
$157 million.
See Note 3 – ‘‘Acquisitions’’ in the consolidated financial statements for additional information relating to these
acquisitions.
We may continue to evaluate possible acquisitions of, or investments in businesses, products, and technologies that are
complementary to our business, which may require the use of cash.
Critical Accounting Policies, Judgments and Estimates
Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial
statements, which have been prepared in accordance with accounting principles generally accepted in the United States.
The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the
reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We
base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from these estimates.
An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions
about matters that are highly uncertain at the time the estimates are made, and if different estimates that reasonably
could have been used, or changes in the accounting estimates that are reasonably likely to occur, could materially impact
the financial statements. We believe the following critical accounting policies reflect the more significant estimates and
assumptions used in the preparation of the consolidated financial statements.
Revenue Recognition. Our revenues are generated from marketing services and fees. Marketing services revenue is generated
from several offerings including: the display of textual, rich media and graphical advertisements, display of text based
links to advertisers’ listings, listing based services, and commerce based transactions. Fees revenue includes revenue from a
variety of consumer and business fee-based services. While the majority of our revenue transactions contain standard
business terms and conditions, there are certain transactions that contain non-standard business terms and conditions. In
addition, we have certain sales transactions that involve multiple element arrangements (arrangements with more than
40