1- [44 mil acquistion cost]- I don't know whether they got the chunk of their income from the new company,I doubt it as I do not know whether acquistion was immediately 'accretive' to earnings.
Mohan & TEC, regarding Viaweb, perhaps the following info will help. Viaweb's total revenues in Q1 were a whopping $290,000 ($650,000 since it's inception in Aug 1995), so though their revenues have grown, I doubt they added anything material to YHOO's Q2. They also had an operating loss of $296,000 in Q1 and accumulated deficit of $2.7 million since inception. With about $1.48 million of paid-in capital, book value at 3/31 came to -$1.37 million. Liabilities were $1.8 million and total assets were $426,000.
YHOO paid for Viaweb with $49 million of stock (>$75 million at current prices) which they immediately registered so that the shares could be sold in the open market. Viaweb had spent, over its life, about $3.5 million (the deficit plus revenues) on development of it's business as "a provider of software and services for hosting online stores" which YHOO proceeded to book primarily as "in-process R&D" before immediately writing it off. Had they booked it as "goodwill" or some other longer-lived intangible asset, it would have been a drag on reported earnings for years. Instead, they charge it off all at once so that future earnings won't have to take the hit. The street ignores big "one-time" charges as if they have no economic relevance, but that is wrong. The fact is that was $44 million of supposed value in Viaweb, real cash to the sellers, that they are asking you to assume they never paid.
I guess you could consider it "accretive" to future earnings to the tune of $44 million.
Bob |
