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Expedia, Inc.
Notes to Consolidated Financial Statements — (Continued)
In January 2010, the FASB issued guidance that requires reporting entities to make new disclosures about
recurring or nonrecurring fair-value measurements including significant transfers into and out of Level 1 and
Level 2 fair value measurements and information on purchases, sales, issuances, and settlements on a gross basis
in the reconciliation of Level 3 fair value measurements. The guidance is effective for annual reporting periods
beginning after December 15, 2009, except for Level 3 reconciliation disclosures that are effective for annual
periods beginning after December 15, 2010. We do not expect the adoption of this guidance to have a material
impact on our consolidated financial statements.
NOTE 3 — Acquisitions and Other Investments
In 2009, we acquired a China-based metasearch company as well as a controlling interest in a company we
initially invested in during 2007 (see additional disclosure below). The purchase price of these companies totaled
$42 million, which was paid in cash during the year. As a result of these acquisitions, we acquired $7 million in
cash and minimal net assets and recorded $52 million in goodwill, $24 million of intangible assets with definite
lives with a weighted average amortization life of 6.6 years, and $15 million in noncontrolling interest. In
addition, during 2009, we paid $10 million of contingent purchase consideration under prior acquisitions as well
as other acquisition related-costs.
The purchase price allocation of these acquisitions is preliminary for up to 12 months after the acquisition
dates and subject to revision, and any change to the fair value of net assets acquired will lead to a corresponding
change to the purchase price allocable to goodwill on a retroactive basis. The results of operations of each of the
acquired businesses have been included in our consolidated results from each transaction closing date forward;
their effect on consolidated revenue and operating income during 2009 was not significant.
In 2008, we acquired four online travel media content companies, one corporate travel company and two
online travel product and service companies, which includes Venere, an online travel provider based in Italy that
focuses on hotel reservations under an agency model. The purchase price of these companies as well as contingent
purchase consideration under prior acquisitions and other acquisition-related costs totaled $475 million, of which
$465 million was paid in cash and $10 million was accrued as of December 31, 2008. The results of operations of
each of the acquired businesses have been included in our consolidated results from each transaction closing date
forward; their effect on consolidated revenue and operating loss during 2008 was not significant. The following
table summarizes the allocation of the purchase price for all acquisitions made in 2008, in thousands:
Goodwill ................................................................. $328,449
Intangible assets with definite lives(1) .......................................... 112,968
Intangible assets with indefinite lives .......................................... 47,641
Net liabilities and non-controlling interests acquired, which includes $21,480 of cash
aquired ................................................................ (14,486)
Total .................................................................. $474,572
(1) Acquired intangible assets primarily consist of supplier relationship assets with a weighted average life of
10.6 years and technology assets with a weighted average life of 3 years. In total, the weighted average life
of acquired intangible assets was 8.3 years.
In one of the 2008 transactions, we acquired a 74% controlling interest with certain rights whereby we may
acquire, and the minority shareholders may sell to us, the additional shares of the company at fair value at
various times through 2011. In another of the 2008 transactions, we acquired an 86% controlling interest with
certain rights whereby we may acquire, and the minority shareholders may sell to us, the additional shares of the
company at fair value, or at an adjusted fair value at our option, during a 30-day period beginning October 1,
2012. Future changes in fair value of the shares for which the minority holders may sell to us above the initial
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