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eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (CONTINUED)
Note 3 Ì Business Combinations, Goodwill and Intangible Assets:
During 2002 and 2003, we completed the purchase acquisitions of Billpoint, EachNet, NeoCom,
PayPal, eBay Australia and New Zealand, CARad, FairMarket and Internet Auction. The following table
summarizes our purchase acquisitions with aggregate purchase prices in excess of $30 million:
Post Net IdentiÑable Deferred Aggregate
Acquisition Tangible Intangible Tax Other Purchase
Company Name Acquisition Date Ownership Assets Assets Liabilities Intangibles Goodwill Price
Billpoint ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ January 2002 100% $ 6,643 $ 1,750 $ (700) $ Ì $ 35,848 $ 43,541
EachNetÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ March 2002 34% 9,379 2,280 (912) Ì 19,253 30,000
PayPal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ October 2002 100% 104,965 277,000 (34,958) 9,943 1,135,554 1,492,504
eBay Australia and
New ZealandÏÏÏÏÏÏÏÏÏÏÏÏÏ October 2002 100% 444 4,650 (1,860) Ì 62,266 65,500
EachNetÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ July 2003 100% 12,345 11,212 (3,599) Ì 124,932 144,890
Internet Auction ÏÏÏÏÏÏÏÏÏÏÏÏ December 2003 62% N/A 14,981 (4,449) 12,144 71,227 93,903
Tangible net assets were valued at their respective carrying amounts as we believe that these amounts
approximated their current fair values at the respective acquisition dates. The valuation of identiÑable
intangible assets acquired was based on management's estimates using valuation reports prepared by an
independent third-party valuation consultant. Such assets consist of customer lists, trademarks and trade
names, developed technologies and other acquired intangible assets including contractual agreements.
IdentiÑable intangible assets are amortized using the straight-line method over the estimated useful lives of
one to eight years. We believe the straight-line method of amortization best represents the distribution of
the economic value of the identiÑable intangible assets. Goodwill represents the excess of the purchase
price over the fair value of the net tangible and identiÑable intangible assets acquired in each business
combination. In accordance with SFAS No. 142, goodwill is no longer subject to amortization. Rather,
goodwill is subject to at least an annual assessment for impairment, applying a fair-value based test. See
""Note 1 Ì The Company and Summary of SigniÑcant Accounting Policies.''
Billpoint
On May 25, 1999, eBay acquired a 100% interest in Billpoint, Inc. a leading provider of billing and
payment fulÑllment services. On February 24, 2000, Billpoint reincorporated in Delaware and we sold an
approximate 35% ownership interest to Wells Fargo Bank. In January 2002, we acquired the 35% minority
interest in Billpoint held by Wells Fargo Bank in a purchase acquisition for approximately $43.5 million in
cash. In October 2002, we acquired PayPal, Inc. and announced that we would phase out Billpoint's
operations. The phase out was completed in the Ñrst half of 2003.
Internet Auction Co., Ltd.
On February 15, 2001, we acquired an approximately 51% majority interest in Internet Auction Co.,
Ltd., (""IAC'' or ""Internet Auction''), a South Korean company in a purchase acquisition for
$120.8 million in cash and incurred $1.1 million of direct acquisition costs. Internet Auction introduced
online trading in South 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 Financial Statements
since February 15, 2001.
On December 17, 2003, we settled our tender oÅer to purchase additional common shares of IAC.
We purchased approximately 1.6 million shares, increasing our ownership to approximately 62%. Based on
the December 17, 2003 exchange rate and estimated acquisition related expenses of $2.2 million, the
purchase price was $93.9 million. Prior to the fourth quarter of 2003, we consolidated our original
investment in IAC's common shares and recorded the minority investor's percentage share of income or
101