Fair Value Measurements

9 Months Ended

Sep. 30, 2012

Fair Value Measurements [Abstract]

Fair Value Measurements

3. Fair Value Measurements

We measure our cash equivalents, marketable securities, and the earn-out liability associated with our acquisition of MPC Data Limited (“MPC”) (see Note 4) at fair value. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value:

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Directly or indirectly observable market-based inputs or unobservable inputs used in models or other valuation methodologies.

Level 3: Unobservable inputs that are not corroborated by market data. The inputs require significant management judgment or estimation.

We classify our cash equivalents and marketable securities within Level 1 or Level 2 because our cash equivalents and marketable securities are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs. We classify our earn-out liability associated with MPC within Level 3 as it is valued using inputs such as management’s estimation of future sales.

Assets and liabilities measured at fair value on a recurring basis as of September 30, 2012 and December 31, 2011 are summarized below (in thousands):

	September 30, 2012
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Direct or Indirect Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets
Cash equivalents:
Money market funds	$	4,425	$	—	$	—	$	4,425
Corporate debt		—		450		—		450
Total cash equivalents		4,425		450		—		4,875
Short-term investments:
Municipal securities		—		355		—		355
Corporate commercial paper		—		5,373		—		5,373
Corporate debt		—		6,054		—		6,054
Total short-term investments		—		11,782		—		11,782
Restricted cash—money market fund		875		—		—		875
Total assets measured at fair value	$	5,300	$	12,232	$	—	$	17,532
MPC earn-out liability	$	—	$	—	$	632	$	632

	December 31, 2011
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Direct or Indirect Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets
Cash equivalents:
Money market funds	$	6,576	$	—	$	—	$	6,576
Corporate debt		—		501		—		501
Total cash equivalents		6,576		501		—		7,077
Short-term investments:
U.S. agency securities		—		1,751		—		1,751
Municipal securities		—		355		—		355
Corporate commercial paper		—		1,250		—		1,250
Foreign government bonds		—		500		—		500
Corporate debt		—		5,763		—		5,763
Total short-term investments		—		9,619	$	—		9,619
Restricted cash—money market fund		875		—		—		875
Total assets measured at fair value	$	7,451	$	10,120	$	—	$	17,571
MPC earn-out liability	$	—	$	—	$	766	$	766