Fair Value Measurements

12 Months Ended

Dec. 31, 2011

Fair Value Measurements [Abstract]

Fair Value Measurements

5. Fair Value Measurements

The fair value measurements of the Company’s financial assets and liabilities measured on a recurring basis at December 31, 2010 were as follows (in thousands):

	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	62,613	$	31,319	$	31,294	$	—
Short-term investments		5,496		5,496		—		—
Total assets measured at fair value	$	68,109	$	36,815	$	31,294	$	—
	Total		Level 1		Level 2		Level 3
Liabilities:
Accrued contingent consideration, current portion	$	1,287	$	—	$	—	$	1,287
Accrued contingent consideration, net of current portion		650		—		—		650
Total liabilities measured at fair value	$	1,937	$	—	$	—	$	1,937

The fair value measurements of the Company’s financial assets and liabilities measured on a recurring basis at December 31, 2011 were as follows (in thousands):

	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	45,292	$	42,292	$	3,000	$	—
Short-term investments		9,895		7,895		2,000		—
Total assets measured at fair value	$	55,187	$	50,187	$	5,000	$	—
	Total		Level 1		Level 2		Level 3
Liabilities:
Accrued contingent consideration, current portion	$	6,795	$	—	$	—	$	6,795
Accrued contingent consideration, net of current portion		742		—		—		742
Total liabilities measured at fair value	$	7,537	$	—	$	—	$	7,537

Cash equivalents and investments are classified within Level 1 or Level 2 of the fair value hierarchy since they are valued using quoted market prices or alternative pricing sources that utilize market observable inputs.

Contingent consideration liabilities are classified as Level 3 of the fair value hierarchy since they are valued using unobservable inputs. The contingent consideration liability represents the estimated fair value of the additional cash consideration payable that is contingent upon the achievement of certain financial and performance milestones. The fair value of this Level 3 liability is estimated based on a discounted probability-weighted income approach derived from revenue and earnings estimates and a probability assessment with respect to the likelihood of achieving the milestone criteria. The current portion of the liability for contingent consideration is included in accrued expenses, and the long-term portion is included in other liabilities.

The changes in the fair value of the Company’s acquisition related contingent consideration for the years ended December 31, 2010 and 2011, were as follows (in thousands):

Balance as of January 1, 2010	$	—
Acquisition date fair value measurement		1,383
Adjustments to fair value measurements		548
Effects of foreign currency translation		6
Balance as of December 31, 2010		1,937
Acquisition date fair value measurement		5,059
Payment of contingent consideration		(1,436	)
Adjustments to fair value measurements		1,941
Effects of foreign currency translation		36
Balance as of December 31, 2011	$	7,537