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79
Note 5 GOODWILL
The changes in the carrying amount of goodwill for the years ended December 31, 2004 and 2005 are as
follows (in thousands):
United States International Total
Balance as of January 1, 2004 $ 1,710,998 $ 94,563 $ 1,805,561
Acquisitions and other (1) 204,911 509,383 714,294
Foreign currency translation adjustments — 31,102 31,102
Reclassification (2) (242,490) 242,490 —
Balance as of December 31, 2004 1,673,419 877,538 2,550,957
Acquisitions and other (1) 47,333 343,556 390,889
Foreign currency translation adjustments — (46,289 ) (46,289)
Balance as of December 31, 2005 $ 1,720,752 $ 1,174,805 $ 2,895,557
(1) Other primarily includes certain purchase price adjustments that affect existing goodwill. In the year ended December 31, 2005,
this also includes a reduction of $59 million of goodwill related to the divestiture of Yahoo! China. See Note 4 — “Investments
in Equity Interests” for additional information.
(2) Reclassification reflects the allocation of goodwill related to the Overture acquisition to the Company’s segments.
Note 6 INTANGIBLE ASSETS, NET
The following table summarizes the Company’s intangible assets, net (in thousands):
December 31, 2004
Gross carrying
amount
Accumulated
amortization (1) Net
Customer, affiliate and advertiser related relationships $ 319,585 $ (114,553) $ 205,032
Developed technology and patents 226,107 (54,269) 171,838
Trademark, trade name and domain name 137,800 (34,004) 103,796
Total intangible assets, net $ 683,492 $ (202,826) $ 480,666
December 31, 2005
Gross carrying
amount
Accumulated
amortization (1) Net
Customer, affiliate and advertiser related relationships $ 348,111 $ (188,669) $ 159,442
Developed technology and patents 371,610 (119,094) 252,516
Trademark, trade name and domain name 183,536 (60,879) 122,657
Total intangible assets, net $ 903,257 $ (368,642) $ 534,615
(1) Foreign currency translation adjustments, reflecting movement in the currencies of the underlying entities, totaled
approximately $10 million as of December 31, 2004 and $1 million as of December 31, 2005.
The intangible assets are all amortizable and have original estimated useful lives as follows:
• Customer, affiliate and advertiser related relationships — two to seven years;
• Developed technology and patents — two to five years; and
• Trademark, trade name and domain name — four to seven years.
The Company recognized amortization expense on intangible assets, including amortization expense of
developed technology and patents included in the cost of revenues, of approximately $54 million,
$146 million and $173 million for 2003, 2004, and 2005, respectively. Based on the current amount of
intangibles subject to amortization, the estimated amortization expense for each of the succeeding five