eBay 2008 Annual Report Download - page 96

Note 3 — Business Combinations, Goodwill and Intangible Assets:
Our acquisitions in 2008, 2007 and 2006 with aggregate purchase prices in excess of $100 million were as
follows:
Bill Me Later, Inc.
On November 7, 2008 we acquired all the outstanding shares of Bill Me Later, Inc. (Bill Me Later) for a total
purchase price of approximately $914.6 million. The purchase price consisted of cash totaling $817.0 million,
$9.9 million in estimated acquisition-related expenses and the assumption of Bill Me Later’s outstanding common
stock options, valued at approximately $87.7 million. The fair value of Bill Me Later’s stock options assumed was
determined using a Black-Scholes model. Bill Me Later is a payments solution company that provides transactional
credit at the point of sale for ecommerce transactions and is included in our Payments segment. Bill Me Later’s
service combines authentication, credit origination, funding, fulfillment, settlement, reporting and customer care
into a single managed solution integrated into a merchant’s existing payment platform. The rationale for acquiring
Bill Me Later is to enhance our leadership position in online payment solutions.
The purchase price was allocated to the tangible assets and intangible assets acquired and liabilities assumed
based on their estimated fair values on the acquisition date. The fair value assigned to identifiable intangible assets
acquired is determined using the income approach, which discounts expected future cash flows to present value
using estimates and assumptions determined by management. Purchased identifiable intangible assets are amor-
tized on a straight-line basis over the respective useful lives. Our preliminary allocation of the purchase price is
summarized below (in thousands):
Net assets acquired, including cash acquired of $33,735 ......................... $ 26,097
Goodwill ............................................................ 688,908
Trade name .......................................................... 13,500
User base ............................................................ 137,700
Developed technology .................................................. 38,000
Other............................................................... 10,400
Total ............................................................. $914,605
Our estimated useful life of the identifiable intangible assets acquired is three years for the developed
technology and five years for the trade name and user base. The allocation of the purchase price for the acquisition
has been prepared on a preliminary basis and changes to that allocation may occur as additional information
becomes available.
The results of operations of Bill Me Later for periods prior to our acquisition were not material to our
consolidated statement of income and, accordingly, pro forma results of operations have not been presented.
Den Bla
˚Avis and BilBasen
On October 6, 2008 we acquired all the outstanding shares of Den Bla
˚Avis and BilBasen for a total purchase
price of approximately $394.1 million. The purchase price consisted of cash totaling $392.0 million and $2.1 million
in estimated acquisition-related expenses. Den Bla
˚Avis and BilBasen are two leading online classifieds sites in
Denmark and are included in our Marketplaces segment. The rationale for acquiring Den Bla
˚Avis and BilBasen is
to further strengthen our leadership position in global classifieds.
The purchase price was allocated to the tangible assets and intangible assets acquired and liabilities assumed
based on their estimated fair values on the acquisition date. The fair value assigned to identifiable intangible assets
acquired is determined using the income approach, which discounts expected future cash flows to present value
using estimates and assumptions determined by management. Purchased identifiable intangible assets are
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eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)