Yahoo 2014 Annual Report Download - page 116

The amortizable intangible assets have useful lives not exceeding six years and a weighted average
useful life of six years. No amounts have been allocated to in-process research and development and
$749 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. This acquisition brings a community of users to the Yahoo Network by deploying
Yahoo’s personalization technology and search infrastructure to deliver relevant content to the
Tumblr user base.
Other Acquisitions—Business Combinations. During the year ended December 31, 2013, the
Company acquired 25 other companies, which were accounted for as business combinations. The
total aggregate purchase price for these other acquisitions was $279 million. The total cash
consideration of $279 million less cash acquired of $2 million resulted in a net cash outlay of $277
million. The allocation of the purchase price of the assets and liabilities assumed based on their
estimated fair values was $95 million to amortizable intangible assets, $2 million to cash acquired,
$44 million to other tangible assets, $34 million to assumed liabilities, and the remainder of $170
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.
Transactions completed in 2014
Flurry. On August 25, 2014, the Company completed the acquisition of Flurry, Inc. (“Flurry”), a
mobile data analytics company that optimizes mobile experiences for developers, marketers, and
consumers. The combined scale of Yahoo and Flurry is expected to create more personalized and
inspiring app experiences for users and enable more effective mobile advertising solutions for brands
seeking to reach their audiences and gain cross-device insights.
The purchase price of $270 million exceeded the estimated fair value of the net tangible and
identifiable intangible assets and liabilities acquired and, as a result, the Company recorded goodwill
of $195 million in connection with this transaction. Under the terms of the agreement, the Company
acquired all of the equity interests (including all outstanding vested options) in Flurry and Flurry
stockholders and vested option holders were paid in cash. Outstanding Flurry unvested options were
assumed and converted into equivalent awards for Yahoo common stock valued at $4 million, which
is being recognized as stock-based compensation expense as the options vest over periods of up to
four years.
The total purchase price of approximately $270 million consisted of cash consideration. The
preliminary allocation of the purchase price of the assets acquired and liabilities assumed based on
their estimated fair values was as follows (in thousands):
Cash acquired $ 12,100
Other tangible assets acquired 52,260
Amortizable intangible assets:
Developed technology 7,100
Customer contracts and related relationships 47,600
Other 720
Goodwill 195,294
Total assets acquired 315,074
Liabilities assumed (45,404)
Total $269,670
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