Salesforce.com 2014 Annual Report Download - page 93

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marketing of Buddy’s service offerings. The goodwill balance is primarily attributed to the assembled workforce
and expanded market opportunities when integrating Buddy’s social media marketing platform with the
Company’s other social media marketing offerings. The goodwill balance is not deductible for U.S. income tax
purposes.
The Company assumed unvested options and restricted stock awards with a fair value of $67.4 million. Of
the total consideration, $36.1 million was allocated to the purchase consideration and $31.3 million was allocated
to future services that are expensed over the remaining service periods on a straight-line basis.
GoInstant, Inc.
On September 4, 2012, the Company acquired for cash the outstanding stock of GoInstant, Inc.
(“GoInstant”) a provider of co-browsing technology that allows two or more people to collaboratively browse the
same website together. The Company acquired GoInstant to, among other things, deliver its customers an easy to
use co-browse experience. The Company has included the financial results of GoInstant in the consolidated
financial statements from the date of acquisition, which have not been material to date. The acquisition date fair
value of the consideration transferred for GoInstant was approximately $50.6 million, which consisted of the
following (in thousands):
Cash ............................................. $49,221
Fair value of stock options assumed .................... 1,336
Total ............................................. $50,557
The fair value of the stock options assumed by the Company was determined using the Black-Scholes
option pricing model. The share conversion ratio of 0.344 was applied to convert GoInstant’s options to the
Company’s options.
The following table summarizes the estimated fair values of assets acquired and liabilities assumed as of the
date of acquisition (in thousands):
Net tangible assets .................................. $ 473
Deferred tax liability ................................ (1,771)
Developed technology ............................... 6,560
Goodwill .......................................... 45,295
Net assets acquired .................................. $50,557
The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets
acquired was recorded as goodwill. The fair values assigned to tangible and identifiable intangible assets
acquired and liabilities assumed were based on management’s estimates and assumptions. During fiscal 2014, the
Company finalized its assessment of fair value of the assets and liabilities assumed at acquisition date. The
adjustments made were not material and are not reflected above.
The developed technology represents the fair value of GoInstant’s co-browsing technology and has an
estimated useful life of three years. The goodwill balance is primarily attributed to the assembled workforce and
expanded market opportunities when integrating GoInstant’s co-browsing technology with the Company’s other
offerings. The goodwill balance is deductible for U.S. income tax purposes.
The Company assumed unvested options with a fair value of $6.2 million. Of the total consideration,
$1.3 million was allocated to the purchase consideration and $4.9 million was allocated to future services that are
expensed over the remaining service periods on a straight-line basis.
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