Yahoo 2006 Annual Report Download - page 84

The allocation of the purchase price of the Company’s share of the assets acquired and liabilities assumed based on
their fair values was as follows (in thousands):
Cash acquired ......................................................... $ 3,763
Other tangible assets acquired.............................................. 2,400
Amortizable intangible assets:
Customer contracts, related relationships and developed technology and intellectual
property rights ..................................................... 18,600
Goodwill ............................................................. 16,030
Total assets acquired ................................................... 40,793
Deferred income taxes ................................................... (6,075)
Total .............................................................. $34,718
The amortizable intangible assets have useful lives not exceeding seven years and a weighted average useful life of
seven years. No amounts have been allocated to in-process research and development and approximately
$16 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.
As a result of this transaction, the Company’s ownership in Yahoo! Australia, which is now part of Yahoo! 7,
decreased to 50 percent. The Company effectively recognized a non-cash gain of approximately $30 million
representing the difference between the fair value of Yahoo! Australia and its carrying value adjusted for the
Company’s continued ownership in Yahoo! 7. This non-cash gain was accounted for as a capital transaction and
recorded as additional paid-in capital because of certain future events that could affect actual realization of the gain.
The Company also recorded a minority interest of $7 million related to its reduced ownership of Yahoo! Australia
and Seven’s retained interest in their contributed net assets.
Investment in Gmarket. On June 12, 2006, the Company acquired an approximate 10 percent interest in Gmarket
Inc., a retail e-commerce provider in South Korea, for $61 million, including direct transaction costs of approx-
imately $1 million.
Other Acquisitions — Business Combinations. During the year ended December 31, 2006, the Company acquired
three other companies which were accounted for as business combinations. The total purchase price for these three
acquisitions was $42 million and consisted of $41 million in cash consideration and $1 million of direct transaction
costs. The total cash consideration of $41 million less cash acquired of $1 million resulted in net cash outlay of
$40 million. Of the purchase price, $27 million was allocated to goodwill, $21 million to amortizable intangible
assets and $6 million to net assumed liabilities. 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.
In each of the three years ended December 31, 2004, 2005, and 2006, the Company also completed immaterial asset
acquisitions that did not qualify as business combinations.
Pro forma results of operations have not been presented for the acquisitions completed during the years ended
December 31, 2005 and 2006 as the results of the acquired companies, not already consolidated, either individually
or in the aggregate were not material to the Company’s consolidated financial results before the acquisitions.
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Yahoo! Inc.
Notes to Consolidated Financial Statements — (Continued)