Salesforce.com 2010 Annual Report Download - page 84

Table of Contents
The following table sets forth the components of intangible assets acquired in connection with the Jigsaw acquisition:
(in thousands) Fair value Useful Life
Developed service technology and database $ 23,560 3 years
Customer relationships 2,440 5 years
Trade name and trademark 2,140 3 years
Total intangible assets subject to amortization $ 28,140
Customer relationships represent the fair values of the underlying relationships and agreements with Jigsaw's customers. Developed service technology
and database represents the fair values of the Jigsaw technology and database that contains the business contact data. Trade name and trademark represents the
fair values of brand and name recognition associated with the marketing of Jigsaw's services. The goodwill balance is not deductible for tax purposes. The
goodwill balance is primarily attributable to Jigsaw's assembled workforce and the expected synergies and revenue opportunities when combining the
business contact data within the Jigsaw solution with the Company's CRM cloud applications.
The fair value of intangible assets was based on the income approach. The acquisition costs which were expensed were not material.
Heroku, Inc.
In January 2011 the Company acquired for cash the stock of Heroku, Inc. ("Heroku"), a platform-as-a-service cloud vendor, built to work in an open
environment and take advantage of the Ruby language. Ruby has become one of the leading development languages used for applications that are social,
collaborative and deliver real-time access to information across mobile devices. The Company has included the financial results of Heroku in the consolidated
financial statements from the date of acquisition. The total cash consideration for Heroku was approximately $216.7 million.
The total preliminary purchase price was allocated to the net tangible and intangible assets and liabilities based upon their fair values as of January 3,
2011 as set forth below. The excess of the preliminary purchase price over the net tangible and intangible assets was recorded as goodwill. The following
table summarizes the estimated fair values of the assets and liabilities assumed at the acquisition date. The primary areas of the preliminary purchase price
allocation that are not yet finalized relate to both current and noncurrent deferred tax liabilities which are subject to change, pending the finalization of certain
tax returns.
(in thousands)
Net tangible assets $ 5,411
Intangible assets 40,060
Deferred tax liability (10,060)
Goodwill 181,304
Total purchase price $ 216,715
The following table sets forth the components of intangible assets acquired in connection with the Heroku acquisition:
(in thousands) Fair value Useful life
Developed technology $ 39,280 3 years
Trade name and trademark 780 3 years
Total intangible assets subject to amortization $ 40,060
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