How does AI formulate transfer decisions?

One thing that has always intruiged me was how the AI decides to build squads, and on what basis.

For example, Chelsea in the jan window of the first season bought landon donovan. Yes, landon donovan. For 8 million. On what basis does the ai decide to buy a 28yr old totally average american footballer for 8 million when they have benayoun, lampard, essien, mikel, ramires and so on.

6 months later they buy Dzeko, which is a very good transfer because Drogba is getting old. So we have here two examples, almost polar opposite in showing how clever an stupid the AI is. I have seen here on these forums many complaints that the AI is crap at squad building, but i see UTD and Chelsea buying up many a good youngster, and players like Dzeko. I see City snapping up Eden Hazard for £25 million, and giving this precocious 20 y/old a 170k contract.

Utd finished 5th in the first season, which is amazing. so what does Fergie do? He buys Coentrao, and a few other very good youngins, and now UTD are having a much better season. Another strange thing is Real bidding for Hamsik. I decide to do the same, and out of curiosity, decide to offer him a 160k contract(my maximum-which at Spurs would not be allowed incidentally), and he chooses me over Real! They probably put him on an 80-100k term, but i don't think any player would choose spurs over Real.

Anyway that is not related to the original question, so anyone have any insights?