Salesforce.com 2012 Annual Report Download - page 98

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The following table sets forth the components of identifiable intangible assets acquired and their estimated
useful lives as of the date of 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
Developed technology represents the fair value of the Heroku platform technology. Trade name and
trademark represents the fair values of brand and name recognition associated with the marketing of Heroku’s
services. The goodwill balance is not deductible for tax purposes. The goodwill balance is primarily attributable
to Heroku’s assembled workforce and the Company’s ability to access a large community of developers and
independent software vendors (“ISVs”) who are building applications in the cloud using the Ruby language.
Additionally, the goodwill balance also reflects the value of expanded market share opportunities that are
expected to occur when combining the Company’s cloud platform with Heroku’s platform and enhancing the
joint platform to allow developers and ISV’s the freedom to choose among a variety of programming languages.
DimDim, Inc.
In January 2011 the Company acquired for cash the stock of DimDim, Inc. (“DimDim”), a provider of
online meeting solutions for business collaboration. The Company has included the financial results of DimDim
in the consolidated financial statements from the date of acquisition. The total purchase consideration for
DimDim was approximately $37.1 million, entirely in cash.
The following table summarizes the estimated fair values of the assets and liabilities assumed at the
acquisition date:
(in thousands)
Net tangible assets .......................................................... $ 1,951
Developed technology ....................................................... 14,450
Deferred tax liability ........................................................ (2,648)
Goodwill .................................................................. 23,373
Net assets acquired .......................................................... $37,126
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 are based on management’s estimates and assumptions. During fiscal 2012 the
Company finalized its assessment of fair value of the assets and liabilities assumed at acquisition date. The
impact of all finalized business combination adjustments were recorded to goodwill and decreased goodwill by a
negligible amount. This adjustment is not reflected in the table above.
Developed technology represents the fair value of the DimDim developed technology. The Company
determined the useful life of the developed technology to be three years. The goodwill balance is not deductible
for tax purposes. The goodwill balance is primarily attributable to DimDim’s assembled workforce and the
expected synergies and expanded market leadership opportunities when integrating DimDim’s on-line meeting
solution technology with the Company’s collaboration cloud offering.
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