eBay 2008 Annual Report Download - page 98

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at approximately $8.1 million. The fair value of StubHub stock options assumed was determined using a Black-
Scholes model. StubHub is an online marketplace that facilitates the resale of event tickets and is included within
our Marketplaces segment.
The purchase price was allocated to the tangible assets, liabilities assumed, and identifiable intangible assets
acquired based on their estimated fair values on the acquisition date. The excess of the purchase price over the
aggregate fair values was recorded as goodwill. The fair value assigned to identifiable intangible assets acquired is
determined using the income approach, which discounts expected future cash flows to present value using estimates
and assumptions determined by management. Purchased intangible assets are amortized on a straight-line basis
over the respective useful lives. Our allocation of the purchase price is summarized below (in thousands):
Net liabilities assumed, net of cash of $25,780 ................................ $(15,663)
Goodwill ............................................................ 221,604
Trade name .......................................................... 44,400
User base ............................................................ 29,000
Developed technology .................................................. 13,100
Total ............................................................. $292,441
Our estimated useful lives of the identifiable intangible assets acquired are three years for the trade name and
developed technology and five years for the user base.
The results of operations of StubHub for periods prior to our acquisition were not material to our consolidated
statement of income and, accordingly, pro forma results of operations have not been presented.
Goodwill
Goodwill information for each reportable segment is as follows (in thousands):
December 31,
2007
Goodwill
Acquired Adjustments
December 31,
2008
Reportable segments:
Marketplaces ..................... $3,016,799 $ 292,085 $(255,745) $3,053,139
Payments ....................... 1,348,373 824,385 (9,701) 2,163,057
Communications . ................. 1,919,341 — (82,779) 1,836,562
$6,284,513 $1,116,470 $(348,225) $7,052,758
Investments accounted for under the equity method of accounting are classified on our balance sheet as long-
term investments. Such investments include any related identifiable intangible assets, deferred tax liabilities and
goodwill. Goodwill related to our equity method investments, included in the table above, was approximately
$27.4 million as of December 31, 2007 and 2008.
The changes in goodwill during the year ended December 31, 2008 were primarily due to the recording of
goodwill for new acquisitions and foreign currency translation adjustments.
We conducted our annual impairment test of goodwill as of August 31, 2008 and determined that no
adjustment to the carrying value of goodwill for any reportable units was necessary. As of December 31, 2008, we
determined that no events or circumstances from August 31, 2008 through December 31, 2008 indicate that a further
assessment was necessary.
We conducted our annual impairment test of goodwill as of August 31, 2007 and concluded that the carrying
amount of our Communications reporting unit exceeded its fair value and recorded an impairment charge of
approximately $1.4 billion during the year ended December 31, 2007. The impairment charge included the impact
90
eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)