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Yahoo! Inc.
Notes to Consolidated Financial Statements—(Continued)
Note 5 G
OODWILL
The changes in the carrying amount of goodwill for the years ended December 31, 2007 and 2008 were as
follows (in thousands):
United States International Total
Balance as of January 1, 2007 .................................. $1,658,879 $1,309,678 $2,968,557
Acquisitions and other ....................................... 859,969 86,232 946,201
Foreign currency translation adjustments ......................... — 87,272 87,272
Balance as of December 31, 2007 ........................... $2,518,848 $1,483,182 $4,002,030
Goodwill impairment charge .................................. — (487,537) (487,537)
Acquisitions and other(*) ..................................... 68,043 37,342 105,385
Foreign currency translation adjustments ......................... — (178,989) (178,989)
Balance as of December 31, 2008 ........................... $2,586,891 $ 853,998 $3,440,889
(*) Other includes a reduction of $19 million of goodwill related to the sale of Kelkoo SAS.
As a result of the goodwill impairment test, the Company concluded that the carrying value of the European
reporting unit, included in the International segment, exceeded its fair value. As required by the second step of
the impairment test, the Company performed an allocation of the fair value to all the assets and liabilities of the
reporting unit, including identifiable intangible assets, based on their fair values, to determine the implied fair
value of goodwill. Accordingly, the Company recorded a goodwill impairment charge of approximately $488
million during 2008 for the difference between the carrying value of the goodwill in the reporting unit and its
implied fair value. The impairment resulted from a combination of factors, including the current global economic
downturn, a persistent decline in business conditions in the European region, reductions in the Company’s
projected operating results and estimated future cash flows, and decreases in revenues and earnings multiples of
comparable companies in that region.
The fair values of the Company’s other reporting units exceeded their estimated carrying values and therefore
goodwill in those reporting units was not impaired.
Note 6 I
NTANGIBLE
A
SSETS
,N
ET
The following table summarizes the Company’s carrying amount of intangible assets, net (in thousands):
December 31, 2007
Gross Carrying
Amount
Accumulated
Amortization(1) Net(2)
Customer, affiliate, and advertiser related relationships ............ $ 252,792 $(109,597) $143,195
Developed technology and patents ............................. 689,873 (305,832) 384,041
Trademark, trade name, and domain name ...................... 208,069 (123,808) 84,261
Total intangible assets, net ............................... $1,150,734 $(539,237) $611,497
December 31, 2008
Gross Carrying
Amount
Accumulated
Amortization(1) Net(2)
Customer, affiliate, and advertiser related relationships ............ $178,868 $ (79,040) $ 99,828
Developed technology and patents ............................. 555,669 (205,501) 350,168
Trademark, trade name, and domain name ...................... 128,190 (92,326) 35,864
Total intangible assets, net ............................... $862,727 $(376,867) $485,860
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