Yahoo 2008 Annual Report Download - page 83

Yahoo! Inc.
Notes to Consolidated Financial Statements—(Continued)
The amortizable intangible assets have useful lives not exceeding six years and a weighted average useful life of
five years. No amounts have been allocated to in-process research and development and $87 million has been
allocated to goodwill. Goodwill represents the excess of the purchase price over the fair value of the net tangible
and identifiable intangible assets acquired and is not deductible for tax purposes. The goodwill recorded in
connection with this acquisition is primarily included in the U.S. segment.
Other Acquisitions—Business Combinations. During the year ended December 31, 2008, the Company acquired
two other companies, which were accounted for as business combinations. The total purchase price for these
acquisitions was $71 million and consisted of $68 million in cash consideration and $3 million of direct
transaction costs. The total cash consideration of $68 million less cash acquired of $25 million resulted in a net
cash outlay of $43 million. Of the purchase price, $51 million was allocated to goodwill, $15 million to
amortizable intangible assets, $9 million to tangible assets, $25 million to cash acquired, and $30 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, 2008, the Company acquired one
company, which was accounted for as an asset acquisition. The total purchase price was $26 million and
consisted of $25 million in cash consideration, and $1 million of direct transaction costs. For accounting
purposes, approximately $36 million was allocated to amortizable intangible assets and $10 million to net
assumed liabilities, primarily deferred income tax liabilities. In connection with the acquisition, the Company
also issued stock-based awards valued at approximately $4 million which is being recognized as stock-based
compensation expense as the awards vest over a period of up to three years.
The Company’s business combinations completed in 2008 do not have a material impact on the Company’s
results of operations, and therefore pro forma disclosures have not been presented.
Note 4 I NVESTMENTS IN E QUITY I NTERESTS
As of December 31, investments in equity interests consisted of the following (dollars in thousands):
2007 2008
Percent
Ownership
of
Common
Stock
Alibaba Group ............................................... $1,440,278 $2,216,659 44%
Alibaba.com ................................................. 100,804 51,999 1%
Yahoo! Japan ................................................ 636,164 905,672 34%
Other ....................................................... 3,671 3,115
Total ................................................... $2,180,917 $3,177,445
Equity Investment in Alibaba Group. On October 23, 2005, the Company acquired approximately 46 percent of
the outstanding common stock of Alibaba Group Holding Limited (“Alibaba Group”), which represented
approximately 40 percent on a fully diluted basis, in exchange for $1.0 billion in cash, the contribution of the
Company’s China-based businesses, including 3721 Network Software Company Limited (“Yahoo! China”), and
direct transaction costs of $8 million. Pursuant to the terms of a shareholder agreement, the Company has an
approximate 35 percent voting interest in Alibaba Group, with the remainder of its voting rights subject to a
voting agreement with Alibaba Group management. Other investors in Alibaba Group include SOFTBANK.
Alibaba Group is a privately-held company. Through its investment in Alibaba Group, the Company has
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