Capitalized Product Costs

The Company’s capitalized product costs include external costs related to the development of content for its learning products and external website development costs for its website. The Company’s capitalized product costs as of December 31, 2011 and 2010 were as follows:

	December 31,
	2011			2010
Content costs	$	36,759		$	31,603
Website development costs		9,835			8,613
Less: accumulated amortization		(34,083	)		(27,032	)
Total	$	12,511		$	13,184

Amortization expense related to content development is charged to cost of sales in the statement of operations and totaled $6,557, $6,916 and $6,896 for the years ended December 31, 2011, 2010 and 2009, respectively. Amortization expense related to website development is included in depreciation and amortization expense and totaled $2,238, $2,434 and $2,391 for the years ended December 31, 2011, 2010 and 2009, respectively.

The Company performs a periodic impairment evaluation of capitalized product development costs. The Company’s evaluation in 2011 and 2010 identified capitalized costs related to platforms that were in the process of being discontinued or non-performing titles, while the 2009 evaluation resulted in minor impairments. Accordingly, the Company accelerated the amortization of these costs, resulting in an increase in cost of sales in the U.S. segment of $347, $720 and $279 in 2011, 2010 and 2009, respectively.