Zynga 2012 Annual Report Download - page 94

purchase price of $45.5 million, of which $43.3 million was paid in cash with the remainder of the issuance of
0.2 million fully vested shares of Series Z convertible preferred stock with a fair value of $2.2 million. As a
result of the acquisitions, we recorded $11.1 million of developed technology, $1.5 million of net liabilities
assumed, and $35.9 million of goodwill. Goodwill for each of the acquisitions represents the excess of the
purchase price over the net tangible and intangible assets acquired and is not deductible for tax purposes.
Goodwill recorded in connection with the acquisitions is primarily attributable to the assembled workforces of
the acquired businesses and the synergies expected to arise after our acquisition of those businesses. In
connection with acquisitions closed in 2011, we incurred transaction costs of approximately $2.3 million.
Pro forma results of operations related to our 2012 and 2011 acquisitions have not been presented because
they are not material to our 2012 or 2011 consolidated statements of operations, either individually or in the
aggregate.
The following table summarizes the purchase date fair value of net tangible and intangible assets acquired
for all business acquisitions for the years ended December 31, 2012 and 2011 (in thousands):
OMGPOP Other Total 2012
Developed technology .......................... $ 83,590 $14,379 $ 97,969
Branding intangible assets ....................... 33,530 — 33,530
Deferred tax liabilities .......................... (42,871) (3,905) (46,776)
Net tangible assets acquired (liabilities assumed) ..... 5,055 400 5,455
Goodwill(1) .................................. 103,782 13,214 116,996
Total ........................................ $183,086 $24,088 $207,174
Total 2011
Developed technology .......................... $ 11,056
Net tangible assets acquired (liabilities assumed) ..... (1,530)
Goodwill(1) .................................. 35,946
Total ........................................ $ 45,472
(1) Includes the impact of adjustments to goodwill resulting from changes in net assets (liabilities)
acquired and other adjustments, pursuant to our business combinations policy.
Prior to the impairment of the developed technology and branding intangible assets acquired in the
OMGPOP acquisition (described in Note 3), the useful lives for the developed technology and branding
intangible assets were three years and seven years, respectively. Subsequent to the impairment, the remaining
useful lives of both the developed technology and branding intangible assets were adjusted to two years. These
assets were, and continue to be, amortized on a straight-line basis. For all acquisitions completed during the years
ended December 31, 2012 and 2011, the weighted-average useful life of all identified acquired intangible assets
is 2.4 and 2.0 years, respectively. Developed technologies associated with acquisitions are being amortized over
periods ranging from one to three years.
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