Yahoo 2005 Annual Report Download - page 79

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73
which related to workforce reduction and the remainder related to excess facilities. As of December 31,
2005, there was no remaining balance related to severance costs or excess facilities.
Acquisitions completed in 2004
3721. On January 2, 2004, the Company completed the acquisition of 3721 Network Software Company
Limited (“3721”), a Hong Kong-based software development company. The acquisition combined the
Company’s global audience and 3721’s keyword search technology to enable the Company to continue
improving its global search services. These factors contributed to a purchase price in excess of the fair
value of net tangible and intangible assets acquired from 3721 and as a result, the Company has recorded
goodwill in connection with this transaction.
The total purchase price of approximately $95 million consisted of $92 million in cash consideration,
$2 million related to stock options exchanged and direct transaction costs of $1 million. The total cash
consideration of approximately $92 million less cash acquired of approximately $7 million resulted in a net
cash outlay of $85 million.
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 $ 6,917
Other tangible assets acquired 4,498
Amortizable intangible assets:
Customer and advertiser related relationships 7,600
Developed technology and patents 3,800
Trade name, trademark and domain name 1,000
Goodwill 80,957
Total assets acquired 104,772
Liabilities assumed (11,186)
Deferred stock-based compensation 1,757
Total $ 95,343
The amortizable intangible assets have useful lives not exceeding five years and a weighted average useful
life of approximately 3 years. No amount has been allocated to in-process research and development and
$81 million has been allocated to goodwill. Goodwill 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. See
Note 4 — “Investments in Equity Interests” for a description of the Company’s investment in Alibaba and
the related divestiture of 3721.
Kelkoo. On April 5, 2004, the Company completed the acquisition of a majority interest in Kelkoo S.A.
(“Kelkoo”), a leading European online comparison shopping service. In July 2004, the Company
completed the acquisition of additional interests in Kelkoo, increasing the Company’s total ownership
interest in Kelkoo to 100 percent. The acquisition expanded the Company’s global commerce presence
and together with the Company’s existing services increased the Company’s competitive position in
Europe. These factors contributed to a purchase price in excess of the fair value of net tangible and
intangible assets acquired from Kelkoo and as a result, the Company has recorded goodwill in connection
with this transaction.
The total purchase price of approximately $571 million consisted of $562 million in cash consideration,
$6 million in incurred liabilities and direct transaction costs of $3 million. The total cash consideration of
approximately $562 million less cash acquired of $39 million resulted in a net cash outlay of $523 million.