The goodwill resulted from our acquiring strategic companies when valuations were high.'However, while we purchased highly valued shares, we were also in effect exchanging our highly valued shares at the same time so that none of the transactions resulting in the creation of large goodwill amounts resulted from a corresponding outlay of our cash. Had these transactions been done at different times when valuations were lower with exactly the same share exchange ratios, the goodwill amounts would have been considerably smaller. However, waiting for lower valuations may have reduced their strategic value or otherwise have allowed competitors to buy these companies thereby, eliminating an opportunity to strengthen JDS Uniphase.
"JDSU was $138 on 3/10/00 (adjusted for stock splits) and closed at $3.80 yesterday, almost triple its 52 week low of $1.32." —footnoted.org
We won't have achieved true bubbleness until a company once again spends $40 billion on acquisitions. Which will later be written off as "goodwill". (Thanks again to Valerie Thompson for the pointer.)