Selected Balance Sheet Accounts

12 Months Ended

Dec. 31, 2011

Selected Balance Sheet Accounts [Abstract]

4. Selected Balance Sheet Accounts

Property and Equipment

Property and equipment consists of the following:


	As of December 31,
	2011			2010
	(in thousands)
Computer software and hardware and capitalized internal use software	$	12,035		$	11,651
Furniture and equipment		1,272			1,505
Leasehold improvements		942			1,024

		14,249			14,180
Less-Accumulated depreciation and amortization		(12,620	)		(12,447	)

Property and Equipment, net	$	1,629		$	1,733

As of December 31, 2011 and 2010, capitalized internal use software, net of amortization, was $0.9 million and $0.2 million, respectively. Depreciation and amortization expense related to property and equipment was $0.7 million for the year ended December 31, 2011. Of this amount, $0.1 million was recorded in cost of revenues and $0.6 million was recorded in operating expenses. Depreciation and amortization expense related to property and equipment was $1.0 million for the year ended December 31, 2010. Of this amount, $0.3 million was recorded in cost of revenues and $0.7 million was recorded in operating expenses.

Investments. On August 16, 2010, the Company acquired less than a 5% interest in Driverside, Inc. for $1,000,000. The Company made an additional investment in Driverside in 2011 for $16,737. The Company recorded the investments in Driverside at cost because the Company does not have significant influence over Driverside. In 2011, Driverside merged with another entity and the Company received a cash payment of $823,000, representing the Company's pro rata share of the initial merger consideration. The $823,000 received at closing of the transaction was recorded as a reduction to the Driverside investment on the Company's consolidated balance sheet. The Company is also entitled to receive its pro rata share of amounts, if any, payable upon satisfaction of contingent payment milestones by Driverside and amounts, if any, released from an escrow account established to satisfy post-closing indemnification claims. The Company reviews for indicators of impairment on a quarterly basis by evaluating whether an event or change in circumstance has occurred that may have a significant adverse effect on the value of the investment. As of December 31, 2011, there were no other changes in the recognized amount of the investment in Driverside.

Intangible Assets. The Company amortizes specifically identified intangible assets using the straight-line method over the estimated useful lives of the assets. In connection with the acquisition of Auto/Cyber on September 17, 2010, the Company identified $4.5 million of intangible assets. The Company's intangible assets will be amortized over the following estimated useful lives:

		December 31, 2011
Intangible Asset	Estimated Useful Life	Gross		Accumulated Amortization			Net
Trademarks/trade names	5 years	$	5,540	$	(4,826	)	$	714
Software and publications	3 years		1,300		(559	)		741
Customer relationships	3 years		1,870		(803	)		1,067
Employment/non-compete agreements	5 years		500		(129	)		371
		$	9,210	$	(6,317	)	$	2,893

Amortization expense is included in "Depreciation and amortization" in the Statement of Operations. Amortization expense for intangible assets for the next five years is as follows:

Year	Amortization Expense
	(in thousands)

2012	$	1,353
2013		1,035
2014		283
2015		206
2016		3
	$	2,880

Goodwill. The Company recorded $11.7 million in goodwill related to the acquisition of Auto/Cyber. Goodwill represents the excess of the purchase price over the fair value of net assets acquired. Goodwill is not amortized and is assessed annually for impairment or whenever events or circumstances indicate that the carrying value of such assets may not be recoverable. See Note 3 for further discussion of goodwill.

Accrued Expenses and Other Current Liabilities

As of December 31, 2011 and 2010, accrued expenses and other current liabilities consisted of the following:

	As of December 31,
	2011		2010
	(in thousands)
Compensation and related costs	$	2,084	$	1,988
Other accrued expenses		2,221		2,103
Amounts due to customers		180		367
Other current liabilities		509		537
Total accrued expenses and other current liabilities	$	4,994	$	4,995

Long-term debt. In connection with the acquisition of Auto/Cyber, the Company issued the Note. Interest is payable at an annual interest rate of 6% in quarterly installments. As of December 31, 2011, the Company had accrued interest of $75,000 related to the Note. The entire outstanding balance of the Note is to be paid in full on September 30, 2015.

At any time after September 30, 2013, holders of the Note may convert all or any part of, but in 200,000 minimum share increments, the then outstanding and unpaid principal of the Note into fully paid shares of the Company's Common Stock at a conversion price of $0.93 per share (as adjusted for stock splits, stock dividends, combinations and other similar events). The right to convert the Note into Common Stock of the Company is accelerated in the event of a change in control of the Company. In the event of default, the entire unpaid balance of the Note will become immediately due and payable and will bear interest at the lower of 8% per year and the highest legal rate permissible under applicable law. See Note 3 for further discussion of the convertible subordinated promissory note.