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that is no longer subject to amortization (in thousands,
Note 4 GOODWILL except per share amounts):
The changes in the carrying amount of goodwill for the
years ended December 31, 2002 and 2003 are as follows Years Ended December 31,
(in thousands): 2001 2002 2003
United Reported net income (loss) $(92,788) $42,815 $237,879
States International Total Goodwill amortization, net of tax 55,850 ––
Balance as of Adjusted net income (loss) $(36,938) $42,815 $237,879
January 1, 2002 $ 47,590 $145,397 $ 192,987
Acquisitions and other (1) 279,492 6,866 286,358 Net income (loss) per share:
Cumulative effect of Basic – as reported $ (0.16) $ 0.07 $ 0.39
accounting change – (64,120) (64,120) Basic – adjusted $ (0.06) $ 0.07 $ 0.39
Diluted – as reported $ (0.16) $ 0.07 $ 0.37
Balance as of
Diluted – adjusted $ (0.06) $ 0.07 $ 0.37
December 31, 2002 327,082 88,143 415,225
Acquisitions and other(1) 1,383,916 6,420 1,390,336 The Company performed its annual assessment of good-
Balance as of will in 2002 and 2003, and concluded that there were no
December 31, 2003 $1,710,998 $ 94,563 $1,805,561 additional impairments.
(1) Other primarily includes the reclassification of certain intangibles to
goodwill in connection with the adoption of SFAS 142 and certain Note 5 INTANGIBLE ASSETS, NET
purchase price adjustments to existing goodwill. See also Note 6 –
‘‘Acquisitions.’’ The following table summarizes the Company’s intangible
assets, net (in thousands):
The Company performed a transitional impairment test of
its goodwill and intangible assets as of January 1, 2002. December 31, 2002
Due to, among other things, the overall softening of the Gross
global economy and the related decline in international carrying Accumulated
amount amortization Net
advertising, the Company recorded a transitional goodwill
impairment loss of approximately $64 million, which was Trademark, trade name and
recorded during the first quarter of 2002 as a cumulative domain name $ 57,100 $ (8,206) $48,894
effect of an accounting change in the Company’s Consoli- Customer, affiliate, and
dated Statements of Operations. The fair value of the advertiser related relationships 52,730 (14,125) 38,605
reporting unit giving rise to the transitional impairment Developed technology
loss was estimated using the expected present value of and patents 8,700 (1,539) 7,161
future cash flows and market valuation approach. Content and other 4,950 (3,358) 1,592
Total intangible assets, net $123,480 $(27,228) $96,252
Due to the adoption of SFAS 142 on January 1, 2002,
the Company ceased amortizing goodwill. Had SFAS 142
December 31, 2003
been in effect during the year ended December 31, 2001
Gross
the Company would not have recorded goodwill amortiza- carrying Accumulated
tion expense of approximately $56 million. The following amount amortization Net
table summarizes net income (loss) adjusted to exclude Trademark, trade name and
goodwill amortization expense, and the related tax effect, domain name $ 74,400 $(17,570) $ 56,830
Customer, affiliate, and
advertiser related relationships 276,855 (43,465) 233,390
Developed technology
and patents 168,900 (13,480) 155,420
Total intangible assets, net $520,155 $(74,515) $445,640
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