Salesforce.com 2013 Annual Report Download - page 86

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Buddy for the fiscal years ended December 31, 2012 and 2011, due to differences in reporting periods and
considering the date the Company acquired Buddy, and the effects of the pro forma adjustments listed above.
GoInstant, Inc.
On September 4, 2012, the Company acquired for cash the outstanding stock of GoInstant, Inc.
(“GoInstant”) a provider of co-browsing technology that allows two or more people to collaboratively browse the
same website together. The Company acquired GoInstant to, among other things, deliver its customers an easy to
use co-browse experience. The Company has included the financial results of GoInstant in the consolidated
financial statements from the date of acquisition, which have not been material to date. The acquisition date fair
value of the consideration transferred for GoInstant was approximately $50.6 million, which consisted of the
following:
Fair value of consideration transferred (in thousands)
Cash ............................................. $49,221
Fair value of stock options assumed .................... 1,336
Total ............................................. $50,557
The fair value of the stock options assumed by the Company was determined using the Black-Scholes
option pricing model. The share conversion ratio of 0.086 was applied to convert GoInstant’s options to the
Company’s options.
The following table summarizes the estimated fair values of assets acquired and liabilities assumed as of the
date of acquisition:
(in thousands)
Net tangible assets .................................. $ 473
Deferred tax liability ................................ (1,771)
Developed technology ............................... 6,560
Goodwill .......................................... 45,295
Net assets acquired .................................. $50,557
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. The estimated fair
values of assets acquired and liabilities assumed are considered preliminary and are based on the information that
was available as of the date of the acquisition. The Company believes that the information provides a reasonable
basis for estimating the fair values of assets acquired and liabilities assumed, but certain items such as current
and noncurrent income taxes payable and deferred taxes may be subject to change as additional information is
received and certain tax returns are finalized. Thus the provisional measurements of fair value set forth above are
subject to change. The Company expects to finalize the valuation as soon as practicable, but not later than one-
year from the acquisition date.
The developed technology represents the estimated fair value of GoInstant’s co-browsing technology and
has an estimated useful life of three years. The goodwill balance is primarily attributed to the assembled
workforce and expanded market opportunities when integrating GoInstant’s co-browsing technology with the
Company’s other offerings. The goodwill balance is deductible for U.S. income tax purposes.
The Company assumed unvested options with a fair value of $6.2 million. Of the total consideration, $1.3
million was allocated to the purchase consideration and $4.9 million was allocated to future services and will be
expensed over the remaining service periods on a straight-line basis.
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