Fair Value Measurements

12 Months Ended

Dec. 31, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 4. Fair Value Measurements

We measure certain financial assets at fair value on a recurring basis, including cash equivalents, short-term investments, and equity investments of publicly traded companies. The fair value of these financial assets was determined based on three levels of inputs:

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

• Level 2: Directly or indirectly observed inputs for the asset or liability, including quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active

• Level 3: Significant unobservable inputs that reflect our own estimates of assumptions that market participants would use

Items Measured at Fair Value on a Recurring Basis

The following tables present information about our financial assets that have been measured at fair value on a recurring basis as of December 31, 2012 and December 31, 2011, and indicates the fair value hierarchy of the valuation inputs utilized to determine fair value (in thousands).

	Fair Value Measurements as of
	December 31, 2012
	Total		Level 1		Level 2		Level 3
Cash equivalents:
Money market funds	$	10,680	$	—	$	10,680	$	—
Corporate notes and bonds	81,235		—		81,235		—
Short-term investments:
Corporate notes and bonds	65,502		—		65,502		—
U.S. government agency securities	42,714		42,113		601		—
Restricted cash equivalents and investments	10,000		—		10,000		—
Equity investments in publicly traded securities	34,334		34,334		—		—
Total	$	244,465	$	76,447	$	168,018	$	—

	Fair Value Measurements as of
	December 31, 2011
	Total		Level 1		Level 2		Level 3
Cash equivalents:
Money market funds	$	6,544	$	—	$	6,544	$	—
Corporate notes and bonds	20,697		—		20,697		—
Short-term investments:
Corporate notes and bonds	39,254		—		39,254		—
U.S. government agency securities	39,485		34,881		4,604		—
Restricted cash equivalents and investments	10,168		1,668		8,500		—
Equity investments in publicly traded securities	37,204		37,204		—		—
Total	$	153,352	$	73,753	$	79,599	$	—

Our equity investments in publicly traded companies consisted of J-Stream Inc., a Japanese media services company, and LoEn Entertainment, Inc., a Korean digital music distribution company. These equity investments are accounted for as available for sale. The aggregate cost basis of these securities totaled $8.6 million as of December 31, 2012 and $10.8 million at December 31, 2011. For the year ended December 31, 2012 we sold for a gain a portion of the LoEn shares we hold, resulting in cash proceeds of $6.4 million and a pre-tax gain of $4.3 million.

Items Measured at Fair Value on a Non-recurring Basis

Certain of our assets and liabilities are measured at estimated fair value on a non-recurring basis, using Level 3 inputs. These instruments are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). See Note 3, Rhapsody Joint Venture, for a description of the fair value determinations related to the 2010 Rhapsody restructuring transaction. See Note 1, Description of Business and Summary of Significant Accounting Policies - Deferred Costs, for a discussion of the 2011 impairment charges related to deferred project costs. See Note 11, Loss on Excess Office Facilities, for a discussion of the losses related to reductions in the use of RealNetworks' office space.