eBay 2011 Annual Report Download - page 108

Other
We completed our acquisition of Magento, which operates an ecommerce storefront platform, on August 16, 2011 . We previously held a
non-controlling interest in Magento of 49.9% of the outstanding shares, and following the completion of the acquisition, we own 100% of the
outstanding shares of Magento. As a result of obtaining control over Magento, our previously held interest was remeasured to fair value, which
resulted in a gain of $56.3 million . The gain has been recognized in interest and other, net in our consolidated statement of income. Our
consolidated financial statements include the operating results of Magento from the date of acquisition. Magento is included in our X.commerce
initiative. Pro forma results of operations have not been presented because the effect of the acquisition was not material to our consolidated results
of operations.
Other acquisition activity during 2011 consisted of eight acquisitions. Four acquisitions are included in our Marketplaces segment and four
acquisitions are included in our Payments segment. The purchase consideration for these acquisitions consisted solely of cash. The allocations of
the purchase price for these acquisitions have been prepared on a preliminary basis and changes to those allocations may occur as additional
information becomes available. Our consolidated financial statements include the operating results of all of these acquisitions from the respective
dates of acquisition. Pro forma results of operations have not been presented because the effect of these acquisitions was not material to our
consolidated results of operations.
2010 Acquisition Activity
We acquired three companies during 2010 for aggregate purchase consideration of $95.9 million consisting primarily of cash. Each of these
three companies is included in our Marketplaces segment. Allocation of the purchase consideration resulted in net tangible assets of $0.3 million ,
purchased intangible assets of $18.0 million and goodwill of $77.6 million .
2009 Acquisition Activity
We acquired Gmarket during the second quarter of 2009. Gmarket is a retail ecommerce marketplace in Korea, and is included in our
Marketplaces segment. Gmarket's purchase consideration included cash of $1.2 billion , fair value of minority interest of $12.2 million and fair
value of options assumed of $5.4 million .
Allocation of the purchase consideration for Gmarket is summarized as follows (in thousands):
Note 4 - Skype Related Transactions
Historically, we had a Communications segment that consisted of Skype Technologies S.A. (“Skype”). On November 19, 2009, we sold
Skype to an investor group. We received cash proceeds of approximately $1.9 billion , a subordinated note issued by a subsidiary of the Buyer in
the principal amount of $125.0 million and a 30 percent equity stake in the outstanding capital stock of the Buyer. The sale resulted in a net gain
of $1.4 billion , which was recorded in interest and other, net in our consolidated statement of income. In conjunction with the sale of Skype, we
reached a legal settlement of a lawsuit between Skype, Joltid and entities controlled by Joltid's founders, which resulted in a $343.2 million
charge
to general and administrative expenses. Our non-controlling interest in Skype for periods after the completion of the sale was accounted for under
the equity method of accounting.
On October 13, 2011, Microsoft Corp. completed its acquisition of Skype and we received approximately $2.3 billion in cash for our
remaining 30 percent equity stake in Skype. The sale resulted in a gain of approximately $1.7 billion , which was recorded in interest and other,
net in our consolidated statement of income.
F-17
•
Magento
•
Other
Purchase Consideration
Net Tangible Assets
Acquired/(Liabilities
Assumed) Purchased Intangible Assets Goodwill
Gmarket Inc.
$
1,226,968
$
50,526
$
378,496
$
797,946