eBay 2004 Annual Report Download - page 106

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eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
In July 2003, we completed the acquisition of all of the remaining outstanding capital stock of EachNet,
increasing our ownership interest from approximately 38% to 100%. The total purchase price for this
transaction was $144.9 million and consisted of approximately $143.3 million in cash and $1.6 million in
acquisition-related expenses. Under the terms of the transaction, $104.9 million of the cash amount was paid
at closing and the remaining $38.4 million was paid on March 1, 2004. We have accounted for the acquisition
of the remaining outstanding capital stock as a purchase and, accordingly, the purchase price has been
allocated to the tangible and intangible assets acquired and liabilities assumed on the basis of their respective
fair values on the acquisition date.
Internet Auction Co., Ltd.
On December 17, 2003, we increased our majority interest of Internet Auction Co., Ltd., (""IAC'' or
""Internet Auction''), from approximately 51% to approximately 62% by the settlement of our tender oÅer for
approximately 1.6 million shares. The total cash consideration for these additional shares was approximately
$93.9 million, which includes approximately $2.2 million in estimated acquisition-related expenses. Internet
Auction introduced online trading in South Korea when it launched in April 1998. Shares of Internet Auction
were listed on the KOSDAQ. 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 losses in minority
interests in our consolidated statement of income.
During September 2004, we purchased additional shares resulting in an aggregate increase of our
ownership interest to approximately 97%. We purchased approximately 4.5 million shares for
KRW125,000 per share for a total cash amount of approximately KRW557 billion. The total cash
consideration for these additional shares was approximately $484.8 million, which includes approximately
$1.7 million in estimated acquisition-related expenses.
On October 5, 2004 we closed our tender oÅer to purchase additional shares of IAC, resulting in an
increase of our ownership interest to approximately 99.7%. We purchased approximately 344,000 shares for
KRW125,000 per share. The total cash consideration for these additional shares was approximately
$37.8 million, which includes approximately $400,000 in estimated acquisition-related expenses.
On December 6, 2004, the delisting of IAC common shares from the KOSDAQ was approved. Under
Korean securities regulations, a seven business day period is required prior to the delisting date for on-the-
market trade of shares. During that seven day period, from November 25, 2004 through December 3, 2004, we
purchased approximately 17,000 additional shares for KRW125,000 per share, to increase our ownership
interest to approximately 99.9%. The total cash consideration for these additional shares was approximately
$2.2 million, which includes approximately $200,000 of estimated acquisition-related expenses.
Through these purchases, we have continued to expand our presence in South Korea, one of the largest
online markets in Asia. This is consistent with our strategy of establishing and expanding our global online
marketplace in countries that represent the majority of the world's e-commerce revenue. The estimated useful
economic lives of the identiÑable intangible assets acquired in the increase in ownership of IAC are eight years
for the user base, Ñve years for the trade name, and two years for the developed technology. The identiÑable
intangible assets are being amortized using the straight-line method over their useful economic lives.
mobile.de Acquisition
On April 1, 2004, we acquired a 100% interest in mobile.de for a cash purchase price of approximately
121 million Euros. mobile.de is a classiÑed advertising website for vehicles in Germany. The total purchase
price recorded was approximately $152 million, including approximately $3 million in estimated acquisition-
related expenses. We accounted for the acquisition as a purchase transaction and, accordingly, the purchase
104