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Acquisitions | 9 Months Ended
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Sep. 30, 2023
Business Combination and Asset Acquisition [Abstract] |
Acquisitions | Acquisitions On July 31, 2023, Zillow Group acquired Aryeo, Inc. (“Aryeo”), a software company that serves real estate photographers, in exchange for approximately $15 million in cash, net of cash acquired, and 380,259 shares of our Class C capital stock with a value of $20 million, for total consideration of $35 million, net of cash acquired. On September 11, 2023, Zillow Group acquired substantially all of the assets and liabilities of Spruce Holdings, Inc. and certain affiliated entities (collectively referred to as “Spruce”), a tech-enabled title and escrow platform, in exchange for approximately $19 million in cash, net of cash acquired. The acquisitions of Aryeo and Spruce have been accounted for as business combinations, and assets acquired and liabilities assumed were recorded at their preliminary estimated fair values. Goodwill 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. Goodwill is measured as the excess of consideration transferred over the net of the fair values of the assets acquired and the liabilities assumed. Goodwill recorded in connection with the acquisition of Aryeo is not deductible for tax purposes, and goodwill recorded in connection with the acquisition of Spruce is deductible for tax purposes. The total preliminary purchase prices have been allocated to the assets acquired and liabilities assumed, including identifiable intangible assets, based on their respective fair values at the acquisition date, as follows (in millions):
| Aryeo |  | Spruce
Cash and cash equivalents | $ | 3 |  |  | $ | 5 |
Goodwill | 26 |  |  | 16 |
Intangible assets | 11 |  |  | 2 |
Other assets | — |  |  | 2 |
Liabilities | (2) |  |  | (1) |
Total preliminary purchase price | $ | 38 |  |  | $ | 24 |
The preliminary estimated fair values of the identifiable intangible assets acquired and associated useful lives consisted of the following (in millions):
| Aryeo |  | Spruce
| Preliminary Estimated Fair Value |  | Estimated Useful Life (in years) |  | Preliminary Estimated Fair Value |  | Estimated Useful Life (in years)
Customer relationships | $ | 5 |  |  | 5 |  | $ | — |  |  | —
Purchased content | 4 |  |  | 3 |  | — |  |  | —
Developed technology | 2 |  |  | 3 |  | 2 |  |  | 3
Total | $ | 11 |  |  |  |  | $ | 2 |  |  |
We used an income approach to measure the fair value of the customer relationships intangible asset acquired from Aryeo 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 a cost approach to measure the fair value of purchased content acquired from Aryeo. We used an income approach to measure the fair value of the developed technology acquired from Aryeo and Spruce based on the relief-from-royalty method. These fair value measurements were based on Level 3 inputs under the fair value hierarchy. Acquisition-related costs incurred, which primarily included legal, accounting and other external costs directly related to the acquisition, are included within acquisition-related costs in our condensed consolidated statements of operations and were expensed as incurred. Unaudited pro forma earnings information has not been presented as the effects were not material to our condensed consolidated financial statements.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//805/tableOfContent + Details
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