Yahoo 2004 Annual Report Download - page 69

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Acquisition completed in 2002
HotJobs. In February 2002, the Company completed the acquisition of HotJobs.com, Ltd., (‘‘HotJobs’’), a recruiting
solutions company, which became part of its search and marketplace offerings and generates revenue primarily through
listings and subscription fees for access to the HotJobs’ database. Through this acquisition, the Company gained a
meaningful presence in the online segment of the recruiting marketplace. This is consistent with the Company’s strategy
of building a diversified global business and providing solutions for users and business partners. These factors contributed
to a purchase price in excess of fair market value of the HotJobs’ net tangible and intangible assets acquired, and as a
result, the Company has recorded goodwill in connection with the transaction.
The total purchase price of approximately $439 million consisted of $192 million in Yahoo! common stock, representing
approximately 24 million shares, $206 million in cash consideration, $34 million related to approximately 7 million stock
options exchanged and direct transaction costs of $7 million. The $206 million of total cash consideration less cash
acquired of approximately $53 million resulted in a net cash outlay of approximately $153 million. The value of the
common stock was determined based on the average market price of Yahoo! common stock over the 5-day period
surrounding the date the terms of the exchange offer were finalized in February 2002. The value of the stock options was
determined using the Black-Scholes option valuation model.
The allocation of the purchase price to the assets acquired and liabilities assumed based on the fair values was as follows
(in thousands):
Cash acquired $ 53,284
Other tangible assets acquired 48,359
Amortizable intangible assets
Existing technology and patents 53,300
Customer contracts and related relationships 36,600
Trade name, trademark, and domain name 8,700
Goodwill 282,264
Total assets acquired 482,507
Liabilities assumed (47,343)
Deferred stock-based compensation 3,928
Total $439,092
Amortizable intangible assets acquired have estimated useful lives not exceeding seven years. No amount has been
allocated to in-process research and development. Goodwill of $282 million represents the excess of the purchase price
over the fair value of the net tangible and intangible assets acquired, and is not deductible for tax purposes.
Acquisitions completed in 2003
Inktomi. On March 19, 2003, the Company completed the acquisition of Inktomi Corporation (‘‘Inktomi’’), a provider of
Web search and paid inclusion services on the Internet. The acquisition combined the Company’s global audience and
Inktomi’s search technology to allow the Company to create a more relevant, comprehensive and higher quality search
offering on the Web. In February 2004, the Company launched its own branded algorithmic search technology, Yahoo!
Search Technology, based on Inktomi’s search technology and began deployment on a worldwide basis. These factors
contributed to a purchase price in excess of the fair value of the Inktomi net tangible and intangible assets acquired, and
as a result, the Company has recorded goodwill in connection with this transaction.
The total purchase price of approximately $290 million consisted of $273 million in cash consideration, $14 million
related to 2 million stock options exchanged, and direct transaction costs $3 million. The $273 million of total cash
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