Yahoo 2009 Annual Report Download - page 80

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Yahoo! Inc.
Notes to Consolidated Financial Statements—(Continued)
in approximately equal parts cash and shares of Yahoo! common stock (approximately 8 million shares) and
outstanding Right Media options and restricted stock units were assumed. Assumed Right Media options and
restricted stock units are exercisable for, or will settle in, shares of Yahoo! common stock. The acquisition
followed the Company’s 20 percent investment in Right Media in October 2006.
The total purchase price of $524 million consisted of $245 million in cash consideration, $236 million in equity
consideration, $40 million for the initial 20 percent investment, and $3 million of direct transaction costs. The
$245 million of total cash consideration less cash acquired of $16 million resulted in a net cash outlay of $229
million. In connection with the acquisition, the Company issued stock-based awards valued at $177 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 ...................................................................... $ 15,508
Other tangible assets acquired ......................................................... 25,542
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 .......................................................................... 440,095
Total assets acquired ............................................................ 593,467
Liabilities assumed .................................................................. (27,700)
Deferred income taxes ............................................................... (41,560)
Total ......................................................................... $524,207
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 identifiable 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 believed the acquisition of Zimbra further strengthened its position in Web
mail and expanded 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 identifiable 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.
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