Yahoo 2008 Annual Report Download - page 81

Download and view the complete annual report

Please find page 81 of the 2008 Yahoo annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 132

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132

Yahoo! Inc.
Notes to Consolidated Financial Statements—(Continued)
The total purchase price of $255 million consisted of $245 million in cash consideration, $8 million in equity
assumed/exchanged, and $2 million of direct transaction costs. The $245 million of total cash consideration less
cash acquired of $10 million resulted in a net cash outlay of $235 million. In connection with the acquisition, the
Company issued stock-based awards valued at $47 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 ...................................................................... $ 10,235
Other tangible assets acquired ......................................................... 13,416
Amortizable intangible assets:
Customer contracts and related relationships .......................................... 30,300
Developed technology and patents .................................................. 11,000
Trade name, trademark, and domain name ........................................... 100
In-process research and development ............................................... 200
Goodwill .......................................................................... 224,385
Total assets acquired ............................................................ 289,636
Liabilities assumed .................................................................. (17,947)
Deferred income taxes ............................................................... (16,640)
Total ......................................................................... $255,049
The amortizable intangible assets have useful lives not exceeding six years and a weighted average useful life of
five years. The Company allocated $224 million 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. ($142 million) and International
($82 million) segments.
Other Acquisitions—Business Combinations. During the year ended December 31, 2007, the Company acquired
two other companies which were accounted for as business combinations. The total purchase price for these
acquisitions was $108 million and consisted of $106 million in cash consideration and $2 million of direct
transaction costs. The total cash consideration of $106 million less cash acquired of $5 million resulted in a net
cash outlay of $101 million. Of the purchase price, $74 million was allocated to goodwill, $33 million to
amortizable intangible assets, $5 million to tangible assets, $5 million to cash acquired, and $9 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.
Other Acquisitions—Asset Acquisitions. During the year ended December 31, 2007, the Company acquired five
companies which were accounted for as asset acquisitions. The total purchase price for these acquisitions was
$61 million and consisted of $23 million in cash consideration, $35 million in equity consideration, $2 million of
assumed liabilities, and $1 million of direct transaction costs. The total cash consideration of $23 million less
cash acquired of $3 million resulted in a net cash outlay of $20 million. For accounting purposes, approximately
$85 million was allocated to amortizable intangible assets, $29 million to net assumed liabilities, primarily
deferred income tax liabilities, $2 million to tangible assets, and $3 million to cash acquired. In connection with
these acquisitions, the Company also issued stock-based awards valued at $19 million that will be recognized as
stock-based compensation expense over the next three years.
75