Yahoo 1998 Annual Report Download - page 50

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the Company’s financial position and the results of operations as if Yoyodyne was
a wholly-owned subsidiary of the Company since inception. During October 1998,
the Company recorded a one-time charge of $2.1 million for acquisition-related
costs. These costs consisted of broker fees, legal and accounting fees, and certain
other expenses directly related to the acquisition.
Acquisition of HyperParallel, Inc. On December 17, 1998, the Company completed
the acquisition of all outstanding shares of HyperParallel, Inc. (“HyperParallel”), a
direct marketing company specializing in data analysis, through the issuance of
74,856 shares of Yahoo! Common Stock and cash, totaling $8.1 million. The acquisi-
tion was accounted for as a purchase in accordance with APB 16. Under the purchase
method of accounting, the purchase price is allocated to the assets acquired and
liabilities assumed based on their estimated fair values at the date of the acquisi-
tion. The excess purchase price over the estimated fair value of the assets acquired
and liabilities assumed has been allocated to goodwill. Results of operations for
HyperParallel have been included with those of the Company for periods subse-
quent to the date of acquisition. The Company estimated that the economic useful
lives of current technology and goodwill were three and seven years, respectively.
The Company recorded a charge to earnings of $2.3 million for in-process research
and development that had not yet reached technological feasibility and had no
alternative future use. Factors considered in estimating the allocation of purchase
price to in-process research and development were estimating cash flows resulting
from the expected revenues to be generated from the project, and discounting the
net cash flows, in addition to other assumptions. If this project is not successfully
developed, the Company’s sales and profitability may be adversely affected in
future periods.
Unaudited Pro Forma Disclosures of Significant Acquisitions. The following unaudited
pro forma consolidated results of operations give effect to the acquisitions of
Viaweb and HyperParallel as if they occurred as of the beginning of the period
(in thousands, except per share data):
Year Ended December 31,
1998 1997
Net revenues $ 204,136 $ 71,392
Net income (loss) $ 22,290 $ (31,866)
Net income (loss) per share - basic $ 0.12 $ (0.18)
Net income (loss) per share - diluted $ 0.10 $ (0.18)
Shares used in per share calculation - basic 184,835 175,929
Shares used in per share calculation - diluted 224,983 175,929
J OINT VENTURES
Yahoo! Japan. During April 1996, the Company signed a joint venture agreement
with SOFTBANK whereby Yahoo! Japan Corporation was formed to establish and
manage in Japan a Japanese version of the Yahoo! Internet Guide, develop related
J apanese online navigational services, and conduct other related business. The
Company’s ownership interest in the joint venture upon inception was 40%. During
November 1997, Yahoo! J apan Corporation completed its initial public offering,
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