Yahoo 2006 Annual Report Download - page 81

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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 ........................................................ $ 38,817
Other tangible assets acquired ............................................. 24,068
Amortizable intangible assets:
Customer, affiliate and advertiser related relationships ......................... 36,100
Developed technology and patents ........................................ 9,100
Trade name, trademark and domain name .................................. 61,300
Goodwill ............................................................ 453,555
Total assets acquired .................................................. 622,940
Liabilities assumed ..................................................... (51,832)
Total ............................................................. $571,108
The amortizable intangible assets have useful lives not exceeding five years and a weighted average useful life of
approximately 5 years. No amount has been allocated to in-process research and development and $454 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.
Musicmatch. On October 18, 2004, the Company completed the acquisition of Musicmatch, Inc. (“Musicmatch”),
a leading provider of personalized music software and services. The acquisition significantly increased the
Company’s presence in the digital music business and together with the Company’s existing music services, Yahoo!
Music, provided one of the most comprehensive suite of music services for users, marketers, artists and record
labels. These factors contributed to a purchase price in excess of the fair value of net tangible and intangible assets
acquired from Musicmatch and as a result, the Company recorded goodwill in connection with this transaction.
The total purchase price of $158 million consisted of $157 million in cash consideration and direct transaction costs
of $1 million. The $157 million of total cash consideration less cash acquired of $3 million resulted in a net cash
outlay of $154 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 ........................................................ $ 2,516
Other tangible assets acquired ............................................. 8,591
Amortizable intangible assets:
Customer contracts and related relationships ................................ 1,700
Developed technology and patents ........................................ 18,100
Trade name, trademark and domain name .................................. 1,100
Goodwill ............................................................ 171,633
Total assets acquired .................................................. 203,640
Liabilities assumed ..................................................... (45,317)
Total ............................................................. $158,323
The amortizable intangible assets have useful lives of three years. No amount has been allocated to in-process
research and development and $172 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.
71
Yahoo! Inc.
Notes to Consolidated Financial Statements — (Continued)