Yahoo 2006 Annual Report Download - page 80

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Transactions 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 of users 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 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 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.
70
Yahoo! Inc.
Notes to Consolidated Financial Statements — (Continued)