GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2011

8.	GOODWILL AND INTANGIBLE ASSETS

Goodwill

The changes in the carrying amount of goodwill are as follows:


	2010			2011			2011
	RMB			RMB			US$
	(In thousands)
Balance as of January 1		63,691			63,686			10,119
Goodwill acquired		—			2,468,874			392,265
Impairment losses		—			(113,011	)		(17,956	)
Foreign currency translation adjustment		(5	)		(7	)		(1	)

Balance as of December 31		63,686			2,419,542			384,427

The impairment loss was related to goodwill resulting from an insignificant business combination made in 2011, the underlying business of which was never integrated into the Company’s business after its acquisition. Due to a significant decline in the popularity and performance of the acquired business and failure to achieve its expected market share, the Company plans to abandon this acquired business, although certain assets were still in limited use as at December 31, 2011. Hence, an impairment charge was made for the entire amount of goodwill relating to the business acquired.

Intangible assets

Finite-lived intangible assets


	As of December 31, 2010
	Gross carrying value		Accumulated amortization			Net carrying value
	RMB		RMB			RMB
			(In thousands)

Land use right		97,611		(6,995	)		90,616
Customer relationships		31,408		(26,870	)		4,538
Software		12,131		(3,572	)		8,559
Trademark		1,727		(248	)		1,479
Others		16,313		(16,117	)		196

		159,190		(53,802	)		105,388


	As of December 31, 2011
	Gross carrying value		Accumulated amortization			Impairment loss			Net carrying value		Net carrying value
	RMB		RMB			RMB			RMB		US$
			(In thousands)

Land use right		223,309		(11,252	)		—			212,057		33,692
Customer relationships		254,169		(40,168	)		(1,031	)		212,970		33,838
Software		44,350		(7,465	)		(3,424	)		33,461		5,316
Trademarks		320,527		(14,567	)		—			305,960		48,612
User list		158,070		(23,418	)		—			134,652		21,394
Others		37,183		(19,097	)		(1,085	)		17,001		2,702

		1,037,608		(115,967	)		(5,540	)		916,101		145,554

Amortization expense for the years ended December 31, 2009, 2010 and 2011 was RMB10.73 million, RMB10.25 million and RMB65.67 million (US$10.43 million), respectively. Estimated amortization expense relating to the existing intangible assets with finite lives for each of next five years is as follows:


	RMB		US$
	(In thousands)

For the years ending December 31,
2012		126,945		20,170
2013		124,493		19,780
2014		97,352		15,468
2015		64,452		10,240
2016		62,463		9,924

The impairment losses are related to intangible assets acquired from an acquired business in 2011, which the Company plans to abandon as of December 31, 2011. Those impairment losses are included in the line item entitled “Other income, net”.

Indefinite-lived intangible assets


	December 31,
	2010		2011			2011
	RMB		RMB			US$
	(In thousands)

Domain name		9,360		9,360			1,487
Trademarks		1,050		3,550			564
License		—		2,000			318

		10,410		14,910			2,369
Impairment loss		—		(2,500	)		(397	)

		10,410		12,410			1,972

The Company’s indefinite-lived intangible assets include the Company’s trademark of “BAIDU”, one domain name asset, an internet publishing license and other trademarks acquired from business combinations. The domain name asset was acquired in July 2006 and the useful life is indefinite; the Company’s trademark of “BAIDU” qualified as a China well-known trademark by the State Trademark Office in March 2008. The registration costs were recorded as an intangible asset with indefinite useful life.

The impairment loss is related to trademarks acquired from an acquired business in 2011 which the Company plans to abandon as of December 31, 2011. The impairment loss is included in the line item entitled “Other income, net”.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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