Google 2007 Annual Report Download - page 99

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Google Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 8. Goodwill and Other Intangible Assets
The changes in the carrying amount of goodwill for the years ended December 31, 2006 and 2007 are as follows (in
thousands):
Balance as of December 31, 2005 ............................................................. $ 194,900
Goodwill acquired ......................................................................... 1,350,219
Balance as of December 31, 2006 ............................................................. 1,545,119
Goodwill acquired ......................................................................... 647,538
Goodwill adjustment ....................................................................... 106,711
Balance as of December 31, 2007 ............................................................. $2,299,368
The goodwill adjustment of $106.7 million was primarily a result of contingent payments earned upon the achievement
of certain performance targets and adjustments for goodwill amounts in connection with the YouTube acquisition.
Information regarding our acquisition-related intangible assets that are being amortized is as follows (in thousands):
As of December 31, 2006
Gross
Carrying
Amount Accumulated
Amortization
Net
Carrying
Value
Patents and developed technology ........................................ $241,185 $ 95,927 $145,258
Customer relationships ................................................ 60,636 16,359 44,277
Tradenames and other ................................................. 183,721 26,415 157,306
Total ........................................................... $485,542 $138,701 $346,841
As of December 31, 2007
Gross
Carrying
Amount Accumulated
Amortization
Net
Carrying
Value
Patents and developed technology ........................................ $364,937 $179,102 $185,835
Customer relationships ................................................ 171,876 37,738 134,138
Tradenames and other ................................................. 196,392 69,769 126,623
Total ........................................................... $733,205 $286,609 $446,596
In addition, during the year ended December 31, 2007, we capitalized intangible assets of $11.6 million, paid in cash,
related to milestone payments for acquisitions completed prior to 2007.
Patents and developed technology, customer relationships, and tradenames and other have weighted-average useful
lives from the date of purchase of 3.4 years, 5.6 years and 4.2 years. Amortization expense of acquisition-related intangible
assets for the years ended December 31, 2005, 2006 and 2007 were $37.0 million, $74.2 million and $158.2 million.
Expected amortization expense for acquisition-related intangible assets on our December 31, 2007 Consolidated Balance
Sheet for each of the next five years is as follows (in thousands):
2008 ...................................................................................... $163,565
2009 ...................................................................................... 111,327
2010 ...................................................................................... 80,244
2011 ...................................................................................... 48,770
2012 ...................................................................................... 15,556
Thereafter ................................................................................. 27,134
$446,596
85