The analysis extents have not been properly set up. Under the Spatial Analyst menu there is a selection for Options. This will open the analysis Options dialog where the analysis extent can be set (see the Extent tab).
In ArcMap, the default setting for Analysis Extent is "Intersection of Inputs". This setting will only consider the area of overlay, if any, between raster datasets. This setting should be changed to "Union of Inputs" when performing operations where more than one raster is being used; like Mosaic or Merge.
Please reference chapter 6 of the "Using ArcGIS Spatial Analyst" for a complete description, instructions, illustrations and an explanation of the analysis environment in Spatial Analyst.