Salesforce.com 2011 Annual Report Download - page 89

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 3years
Total intangible assets subject to amortization ...................... $40,060
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