Yahoo 2008 Annual Report Download - page 80

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Yahoo! Inc.
Notes to Consolidated Financial Statements—(Continued)
and intangible assets acquired and is not deductible for tax purposes. The goodwill recorded in connection with
this acquisition is included in the U.S. segment.
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 $303 million consisted of $290 million in cash consideration, $11 million in equity
assumed/exchanged, and $2 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.
The allocation of the purchase price of the assets acquired and liabilities assumed based on their fair values was
as follows (in thousands):
Cash acquired ...................................................................... $ 10,663
Other tangible assets acquired ......................................................... 18,519
Amortizable intangible assets:
Customer contracts and related relationships .......................................... 13,200
Developed technology and patents .................................................. 65,400
Trade name, trademark, and domain name ........................................... 700
Goodwill .......................................................................... 244,655
Total assets acquired ............................................................ 353,137
Liabilities assumed .................................................................. (18,910)
Deferred income taxes ............................................................... (31,720)
Total ......................................................................... $302,507
The amortizable intangible assets have useful lives not exceeding seven years and a weighted average useful life
of four years. No amounts have been allocated to in-process research and development and $245 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 U.S. segment.
BlueLithium. On October 15, 2007, the Company acquired BlueLithium, Inc. (“BlueLithium”), an online global
advertising network. The Company believes that BlueLithium complements the Company’s leading advertising
tools and capabilities. The purchase price exceeded the fair value of the net tangible and intangible assets
acquired from BlueLithium 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 BlueLithium. BlueLithium stockholders were paid in cash and outstanding
BlueLithium options and restricted stock units were assumed. Assumed BlueLithium options and restricted stock
units will be exercisable for, or will settle in, shares of Yahoo! common stock.
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