Goodwill hunting at Google…

One of the many 10-Qs that came in late Friday was Google’s (GOOG) 57-pager, which was filed at 4:54 pm. By far the most interesting footnote in Google’s quarterly filings is the one that deals with acquisitions. During the quarter, the company announced a couple of high-profile — at least in tech circles — deals, including its purchase of Slide for $179 million and closing its acquisition of AdMob, a deal that was announced last November.

The thing with a lot of these tech deals is that while the purchase prices are often many millions, the assets, so to speak, tend to be pretty meager: perhaps there’s some servers, some customer relationships and a few patents on the books. But the biggest assets are usually the human capital and there’s no way to protect founders or teams of developers from taking off for greener pastures. Just look at AdMob founder Omar Hamoui, who has already departed from Google, citing the oft-abused “personal reasons”.

Which brings us to Footnote #8 in Google’s Q. There’s a nifty little chart that provides details on Slide, AdMob and On2, a third company Google acquired this year. But what’s really interesting about the chart is when you drill down another layer and see that nearly 85% of AdMob’s $681 million purchase price is accounted for as goodwill. That same ratio is 75% for Slide and 70% for On2. Google also provides another column in the chart for all other deals in aggregate and the goodwill ratio there is significantly lower at 62%.

One way to look at goodwill is the placeholder between the hard assets and the hype. What the chart in Google’s Q clearly shows is that there’s a lot of hype — or at least hard to value intangibles — in the high-profile names that draw the headlines on sites like TechCrunch and AllThingsD.

Image source: Paul Sakuma/Associated Press


Speaking of mergers, I have 3 free tickets to the Morningstar Stocks Forum taking place tomorrow and Thursday here in Chicago. I’ll be speaking tomorrow afternoon on the unheralded joys of reading SEC filings. First three people to respond get the tickets, which normally cost $349.