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This excerpt taken from the EBAY 8-K filed Oct 1, 2007. Item 2.06
Material Impairments
The disclosure set forth in Item 1.01 above is hereby
incorporated herein by reference. On September 28, 2007,
eBay concluded that its financial results for the three months
ended September 30, 2007 will reflect a charge associated
with its Skype business of approximately $1.4 billion. This
charge reflects the impairment of goodwill, including the impact
on goodwill of the cash payment referred to in Item 1.01
above (the “Settlement Payment”), arising from
eBay’s acquisition of Skype in October 2005.
This charge is the result of the updated long-term financial
outlook for Skype developed as part of eBay’s strategic
planning cycle conducted annually during its third quarter. This
updated financial outlook for Skype was then reviewed in
conjunction with eBay’s annual goodwill impairment testing
that is undertaken as of August 31st of each year.
Other than the Settlement Payment, eBay does not anticipate any
future cash payments related to the goodwill impairment charge.
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