eBay 2008 Annual Report Download - page 97

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amortized on a straight-line basis over the respective useful lives. Our preliminary allocation of the purchase price is
summarized below (in thousands):
Net liabilities assumed, net of cash acquired of $3,957 .......................... $(31,612)
Goodwill ............................................................ 281,610
Trade name .......................................................... 74,100
User base ............................................................ 56,800
Developed technology .................................................. 13,200
Total ............................................................. $394,098
Our estimated economic 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 Den Bla
˚Avis and BilBasen 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.
Fraud Sciences Ltd.
On January 30, 2008, we acquired all of the outstanding shares of Fraud Sciences Ltd. (“Fraud Sciences”) for a
total aggregate purchase price of approximately $153.6 million. The purchase price consisted of cash totaling
$148.3 million, $0.9 million in estimated acquisition-related expenses and the assumption of Fraud Sciences’
outstanding common stock options, valued at approximately $4.4 million. The fair value of Fraud Sciences’ stock
options assumed was determined using a Black-Scholes model. Fraud Sciences provides online risk management
tools and is included within our Payments segment. The rationale for acquiring Fraud Sciences is to enhance
PayPal’s proprietary fraud management systems and accelerate our development of next generation fraud detection
tools.
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 excess of the purchase price over the aggregate fair
values was recorded as goodwill. 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 intangible assets are amortized on a straight-line basis over the
respective useful lives. Our allocation of the purchase price is summarized below (in thousands):
Net liabilities assumed, net of cash acquired of $198 ............................ $ (5,117)
Goodwill ............................................................ 135,477
Developed technology .................................................. 23,200
Total ............................................................. $153,560
Our estimated useful life of the identifiable intangible assets is two years for the developed technology.
The results of operations of Fraud Sciences 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.
StubHub, Inc.
On February 13, 2007, we acquired all of the outstanding shares of StubHub, Inc. (“StubHub”) for a total
purchase price of $292.4 million. The purchase price was comprised of cash totaling $283.2 million, $1.1 million in
estimated acquisition-related expenses and the assumption of StubHub’s outstanding common stock options, valued
89
eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)