Yahoo 2005 Annual Report Download - page 77

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71
Note 3 ACQUISITIONS
The following table summarizes significant acquisitions (including business combinations, asset
acquisitions and a strategic investment) completed during the three years ended December 31, 2005
(in millions):
Purchase
Price Goodwill
Amortizable
Intangibles
2003
Inktomi $ 290 $ 208 $ 49
Overture $ 1,732 $ 1,147 $ 354
2004
3721 $ 95 $ 81 $ 12
Kelkoo $ 571 $ 454 $ 107
Musicmatch $ 158 $ 172 $ 21
Other acquisitions $ 49 $ 41 $ 14
2005
Verdisoft $ 58 — $ 93
Yahoo! Europe (1) and Yahoo! Korea $ 501 $ 388 $ 87
Other acquisitions $ 79 $ 58 $ 32
Alibaba (see Note 4 — “Investments in Equity Interests”)
(1) Yahoo! Europe refers to three separate companies, Yahoo! France, Yahoo! Germany and Yahoo! UK, collectively called
“Yahoo! Europe”, previously joint ventures with SOFTBANK Corp. (“SOFTBANK”).
Acquisitions completed in 2003
Inktomi. On March 19, 2003, the Company completed the acquisition of Inktomi Corporation
(“Inktomi”), a provider of 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 Internet. 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 net tangible and intangible assets acquired from Inktomi
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 of $3 million. The
$273 million of total cash consideration less cash acquired of approximately $45 million resulted in a net
cash outlay of $228 million. 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 $ 44,610
Other tangible assets acquired 37,143
Amortizable intangible assets:
Customer and advertiser related relationships 23,500
Developed technology and patents 25,900
Goodwill 207,804
Total assets acquired 338,957
Liabilities assumed (50,638)
Deferred stock-based compensation 1,287
Total $ 289,606