Fair Value Measurements
 12 Months Ended
Dec. 31, 2013
Fair Value Disclosures [Abstract]  
Fair Value Measurements
Fair Value Measurements
The Company measures financial assets at fair value on an ongoing basis. The estimated fair value of the Company's financial assets was determined using the following inputs at December 31, 2013 and 2012 (in thousands):
 
 
Fair Value Measurements at Reporting Date Using
December 31, 2013
 
Total
 
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
 
Significant
Other Observable Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets:
 
 
 
 
 
 
 
 
Money market funds(1)
 
$
6,306

 
$
6,306

 
$
—

 
$
—

Corporate notes and obligations(2)
 
6,115

 
—

 
6,115

 
—

U.S. government and agency obligations(2)
 
1,751

 
—

 
1,751

 
—

Total
 
$
14,172

 
$
6,306

 
$
7,866

 
$
—

_______________________________________________________________________________

(1)
Included in cash and cash equivalents on the consolidated balance sheet.
(2)
Included in short-term investments on the consolidated balance sheet.
 
 
Fair Value Measurements at Reporting Date Using
December 31, 2012
 
Total
 
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
 
Significant
Other Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets:
 
 
 
 
 
 
 
 
Money market funds(1)
 
$
3,338

 
$
3,338

 
$
—

 
$
—

U.S. Treasury bills(2)
 
1,000

 
1,000

 
—

 
—

Corporate notes and obligations(2)
 
6,071

 
—

 
6,071

 
—

U.S. government and agency obligations(2)
 
5,700

 
—

 
5,700

 
—

Total
 
$
16,109

 
$
4,338

 
$
11,771

 
$
—

Liabilities:
 
 
 
 
 
 
 
 
Contingent consideration(3)
 
$
1,750

 
$
—

 
$
—

 
$
1,750

Total
 
$
1,750

 
$
—

 
$
—

 
$
1,750

_______________________________________________________________________________

(1)
Included in cash and cash equivalents on the consolidated balance sheet.
(2)
Included in short-term investments on the consolidated balance sheet.
(3)
Included in accrued expenses on the consolidated balance sheet.
The tables below presents the changes during the period related to balances measured using significant unobservable inputs (Level 3) for years ended December 31, 2013 and 2012 (in thousands):
 
Balance at
December 31,
2012
 
Additions
 
Payments
 
Balance at
December 31,
2013
Liabilities:
 
 
 
 
 
 
 
Contingent consideration
$
1,750

 
$
—

 
$
(1,750
)
 
$
—

Total
$
1,750

 
$
—

 
$
(1,750
)
 
$
—


During 2013 the Company paid 100% of the earn-out payment related to acquisition of Webcom as a result of achievement of milestones specified in the merger agreement.
Valuation of Investments, Put Option and Warrants
Level 1 and Level 2
The Company's available-for-sale securities include money market funds, U.S. Treasury bills, commercial paper, corporate notes and obligations, and U.S. government and agency obligations. The Company values these securities using a pricing matrix from a pricing service provider, who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs). The Company classifies all of its available-for-sale securities, except for money market funds and U.S. Treasury, as having Level 2 inputs. The Company validates the estimated fair value of certain securities from a pricing service provider on a quarterly basis. The valuation techniques used to measure the fair value of the financial instruments having Level 2 inputs, all of which have counterparties with high credit ratings, were derived from the following: non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments or pricing models, with all significant inputs derived from or corroborated by observable market data.
Level 3
Contingent consideration is defined as earn-out payments which the Company may pay in connection with acquisitions. Contingent consideration liabilities are classified as Level 3 liabilities, as the Company uses unobservable inputs to value them, which is a probability-based income approach. Subsequent changes in the fair value of contingent consideration liabilities will be recorded within the acquisition-related contingent consideration in the Company's condensed consolidated statements of comprehensive loss.