Yahoo 1998 Annual Report Download - page 49

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identified intangibles, including the value of purchased technology and other
intangibles will be amortized on a straight-line basis over three and seven years,
respectively. Amortization expense of purchased technology and other intangible
assets was $2.9 million and $2.0 million, respectively, for the year ended December
31, 1998. A deferred tax liability has been recognized for the difference between the
assigned values for book purposes and the tax bases of assets in accordance with
the provisions of SFAS 109. In addition, other factors were considered in discus-
sions with the Staff in determining the value assigned to purchased in-process
technology such as research projects in areas supporting the online store technol-
ogy (including significant enhancement to the ability of the product to support
multiple users and multiple servers), developing functionality to support the ability
to process credit card orders, and enhancing the product’s user interface by devel-
oping functionality that would allow the product to be used outside of the United
States. If none of these projects is successfully developed, the Company’s sales and
profitability may be adversely affected in future periods. Additionally, the failure
of any particular individual project in process could impair the value of other
intangible assets acquired. The Company began to benefit from the purchased
in process technology in late 1998.
Acquisition of WebCal Corporation. On J uly 17, 1998, the Company completed the
acquisition of WebCal Corporation (“WebCal”), a privately-held developer and
marketer of Web-based calendaring and scheduling products, and publisher of
EventCal, a comprehensive database of world-wide public events. Under the terms
of the acquisition, which was accounted for as a pooling of interests, the Company
exchanged 541,908 shares of Yahoo! Common Stock for all of WebCal’s outstanding
shares. The historical operations of WebCal are not material to the Company’s
financial position or results of operations, therefore, prior period financial state-
ments have not been restated for this acquisition. WebCal’s accumulated deficit
on July 17, 1998 was $1.1 million. Net revenues and pre-tax net loss for WebCal in
1998 through the date of the acquisition approximated $2,000 and $847,000,
respectively.
Acquisition of Yoyodyne Entertainment, Inc. On October 20, 1998, the Company
acquired Yoyodyne Entertainment, Inc., a privately-held, direct marketing services
company. Under the terms of the acquisition, which was accounted for as a pooling
of interests, the Company exchanged 561,244 shares of Yahoo! Common Stock and
options and warrants to purchase Yahoo! Common Stock for all of Yoyodyne’s
outstanding shares, options, and warrants. The consolidated financial statements
for the three years ended December 31, 1998 and the accompanying notes reflect 56 57
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