SAI: Will AOL Start Writing off Bebo Soon?
Silicon Alley Insider is asking an uncomfortable question—or rather, at least it’s uncomfortable for AOL to think about: when will the company start writing off its $850 million purchase of Bebo? It certainly doesn’t look good.
“Per [Time Warner’s] most recent SEC filing, the company is booking almost all of the purchase price—$760 million—as goodwill. Another $86 million went to ‘specific amortizable intangible assets.’ That is: Beyond $11 million in actual stuff—servers, Aeron chairs, etc—there’s almost [nothing] there.”
The site defined goodwill as what a company pays over and above what the other company’s physical assets are worth—that’s par for the course with Internet site purchases, since most of the value isn’t in physical buildings.
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