eBay 2001 Annual Report Download - page 78

eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (CONTINUED)
outstanding 30% interest in eBay Japan held by NEC for approximately $1.7 million. See ""Note 17 Ì
Subsequent Events to the Consolidated Financial Statements.''
Half.com
On July 11, 2000, we acquired Half.com, Inc. (""Half.com''). Half.com was incorporated in
Pennsylvania in June 1999 and provides a Ñxed-price, online e-commerce site that allows people to buy
and sell new and previously owned goods at discounted prices.
In connection with the merger, we issued, or reserved for issuance, a total of approximately 5,484,000
shares of eBay common stock to Half.com's existing shareholders, option holders and warrant holders as
consideration for all shares of capital stock, options and warrants of Half.com held immediately prior to
consummation of the merger. The merger was accounted for as a pooling of interests.
Internet Auction Company
On February 15, 2001, we acquired an approximately 51% majority interest in Internet Auction Co.,
Ltd., a South Korean company for $120.8 million in cash and incurred $1.1 million of direct acquisition
costs. Internet Auction introduced online trading in Korea when it launched in April 1998. Shares of
Internet Auction are listed on the KOSDAQ. The transaction was accounted for using the purchase
method of accounting and accordingly, the results of operations of Internet Auction have been included in
our consolidated Ñnancial statements since February 15, 2001. The aggregate purchase price was allocated
to tangible and identiÑable intangible assets acquired and liabilities assumed on the basis of their estimated
fair values on the acquisition date.
Tangible assets were valued at their respective carrying amounts as we believe that these amounts
approximate their current fair values. The valuation of the identiÑable intangible assets acquired was based
on management's estimates using a valuation report prepared by an independent third-party valuation
consultant and consists of customer base, assembled workforce, developed technology and trade names.
IdentiÑable intangible assets are amortized using estimated useful lives ranging from two to Ñve years.
The excess of the aggregate purchase price over the fair value of the identiÑable net assets acquired of
$82.7 million has been recognized as goodwill and is being amortized over a Ñve-year useful life. See
""Note 1 Ì The Company and Summary of SigniÑcant Accounting Policies, Recent Accounting
Pronouncements.''
The aggregate purchase price was allocated as follows (in thousands):
Net tangible assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 67,670
IdentiÑable intangible assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9,000
Deferred tax liabilityÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (3,600)
GoodwillÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 82,691
Minority interest ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (33,834)
Aggregate purchase price ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $121,927
iBazar S.A.
On May 18, 2001, we completed our acquisition of iBazar S.A. (""iBazar'') in a transaction accounted
for as a purchase business combination. iBazar is a French-based corporation that introduced online
trading in France and at the time of the acquisition had websites in Belgium, Brazil, France, Italy, the
Netherlands, Portugal, Spain and Sweden. As consideration for the acquisition, we issued shares in a
Belgian subsidiary exchangeable for 2,045,054 shares of eBay common stock valued at $120.4 million, paid
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