Yahoo 2007 Annual Report Download - page 78

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The preliminary allocation of the purchase price of the assets acquired and liabilities assumed based on their fair
values was as follows (in thousands):
Cash acquired ........................................................ $ 15,508
Other tangible assets acquired ............................................. 26,776
Deferred tax assets ..................................................... 8,422
Amortizable intangible assets:
Customer contracts and related relationships ................................ 42,300
Developed technology and patents ........................................ 42,400
Trade name, trademark, and domain name .................................. 19,200
Goodwill ............................................................ 440,146
Total assets acquired .................................................. 594,752
Liabilities assumed ..................................................... (27,619)
Deferred income taxes .................................................. (41,560)
Total ............................................................. $525,573
The amortizable intangible assets have useful lives not exceeding seven years and a weighted average useful life of
six years. No amounts have been allocated to in-process research and development and $440 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. The goodwill recorded in connection with this
acquisition is included in the United States segment. The Company may make additional adjustments to the
purchase price allocation related to goodwill and tangible assets acquired.
Zimbra. On October 4, 2007, the Company acquired Zimbra, Inc. (“Zimbra”), a provider of e-mail and
collaboration software. The Company believes the acquisition of Zimbra will further strengthen its position in
Web mail and expand the Company’s presence in universities, small and medium businesses and service provider
partners. The purchase price exceeded the fair value of net tangible and intangible assets acquired from Zimbra and
as a result, the Company recorded goodwill in connection with this transaction. Under the terms of the agreement,
the Company acquired all of the equity interests (including all outstanding options and restricted stock units) in
Zimbra. Zimbra stockholders were paid in cash and outstanding Zimbra options and restricted stock units were
assumed. Assumed Zimbra options and restricted stock units are exercisable for, or will settle in, shares of Yahoo!
common stock.
The total purchase price of $302 million consisted of $290 million in cash consideration, $11 million in equity
assumed/exchanged, and $1 million of direct transaction costs. The $290 million of total cash consideration less
cash acquired of $11 million resulted in a net cash outlay of $279 million. In connection with the acquisition, the
Company issued stock-based awards valued at $38 million which is being recognized as stock-based compensation
expense as the awards vest over a period of up to four years.
76
Yahoo! Inc.
Notes to Consolidated Financial Statements — (Continued)