Acquisition

12 Months Ended

Dec. 31, 2021

Equity Method Investments and Joint Ventures [Abstract]

Acquisition of ShowingTime.com, Inc.

On September 30, 2021, Zillow Group acquired ShowingTime in exchange for approximately $511.8 million in cash, subject to certain adjustments. Our acquisition of ShowingTime has been accounted for as a business combination, and assets acquired and liabilities assumed were recorded at their preliminary estimated fair values as of September 30, 2021. Goodwill, which represents the expected synergies from combining the acquired assets and the operations of the acquirer, as well as intangible assets that do not qualify for separate recognition, is measured as of the acquisition date as the excess of consideration transferred, which is also measured at fair value, and the net of the fair values of the assets acquired and the liabilities assumed as of the acquisition date.

The total preliminary purchase price has been allocated to the assets acquired and liabilities assumed, including identifiable intangible assets, based on their respective fair values at the acquisition date. The total preliminary purchase price was allocated as follows (in thousands):


Cash and cash equivalents	$	14,453
Identifiable intangible assets	111,100
Goodwill	388,885
Other acquired assets	6,006
Deferred tax liability	(3,920)
Other assumed liabilities	(4,751)
Total preliminary estimated purchase price	$	511,773

The preliminary estimated fair value of identifiable intangible assets acquired and associated useful lives consisted of the following (in thousands):


	Preliminary Estimated Fair Value		Estimated Weighted-Average Useful Life (in years)
Customer relationships	$	54,500	8
Developed technology	47,600		4
Trade names and trademarks	9,000		10
Total	$	111,100

We used an income approach to measure the fair value of the customer relationships based on the excess earnings method, whereby the fair value is estimated based upon the present value of cash flows that the applicable asset is expected to generate. We used an income approach to measure the fair value of the developed technology and the trade names and trademarks based on the relief-from-royalty method. These fair value measurements were based on Level 3 inputs under the fair value hierarchy.

Our estimates and assumptions related to the purchase price allocation are preliminary and subject to change during the measurement period (up to one year from the acquisition date) as we finalize the amounts of intangible assets, goodwill and deferred taxes recorded in connection with the acquisition.

Acquisition-related costs incurred, which primarily included legal, accounting and other external costs directly related to the acquisition, are included within Acquisition-related costs within our consolidated statements of operations and were expensed as incurred.

On an unaudited pro forma basis, consolidated revenue would have been approximately 1% higher for the year ended December 31, 2021 and approximately 2% higher for the year ended December 31, 2020 if the acquisition would have been consummated as of January 1, 2020. Unaudited pro forma earnings information has not been presented as the effects were not material to our consolidated financial statements.