FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2012

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

NOTE 5—FAIR VALUE MEASUREMENTS

        The Company categorizes its assets and liabilities measured at fair value into a fair value hierarchy that prioritizes the inputs used in pricing the asset or liability. The three levels of the fair value hierarchy are:

• •

  Level 1: Observable inputs obtained from independent sources, such as quoted prices for identical assets and liabilities in active markets.

  •

  Level 2: Other inputs that are observable directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs that are derived principally from or corroborated by observable market data. The fair values of the Company's Level 2 financial assets are primarily obtained from observable market prices for identical underlying securities that may not be actively traded. Certain of these securities may have different market prices from multiple market data sources, in which case an average market price is used.

  •

  Level 3: Unobservable inputs for which there is little or no market data and require the Company to develop its own assumptions, based on the best information available in the circumstances, about the assumptions market participants would use in pricing the assets or liabilities. See below for a discussion of fair value measurements made using Level 3 inputs.

        The following tables present the Company's assets and liabilities that are measured at fair value on a recurring basis:

	March 31, 2012
	Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements
	(In thousands)
Assets:
Cash equivalents:
Treasury and government agency money market funds	$	284,629	$	—	$	—	$	284,629
Commercial paper		—		176,963		—		176,963
Time deposits		—		4,650		—		4,650
Marketable securities:
Corporate debt securities		—		39,044		—		39,044
States of the U.S. and state political subdivisions		—		112,505		—		112,505
Long-term investments:
Auction rate security		—		—		7,720		7,720
Marketable equity securities		107,842		—		—		107,842
Total	$	392,471	$	333,162	$	7,720	$	733,353

	December 31, 2011
	Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Total Fair Value Measurements
	(In thousands)
Assets:
Cash equivalents:
Treasury and government agency money market funds	$	321,314	$	—	$	—		$	321,314
Commercial paper		—		237,942		—			237,942
Time deposits		—		4,750		—			4,750
Marketable securities:
Corporate debt securities		—		48,705		—			48,705
States of the U.S. and state political subdivisions		—		112,323		—			112,323
Equity security		4,667		—		—			4,667
Long-term investments:
Auction rate security		—		—		5,870			5,870
Marketable equity securities		74,691		—		—			74,691
Total	$	400,672	$	403,720	$	5,870		$	810,262
Liabilities:
Contingent consideration arrangement	$	—	$	—	$	(10,000	)	$	(10,000	)

        The following table presents the changes in the Company's assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

	Three Months Ended March 31,
	2012					2011
	Auction Rate Security		Contingent Consideration Arrangement			Auction Rate Securities			Contingent Consideration Arrangement
	(In thousands)
Balance at January 1	$	5,870	$	(10,000	)	$	13,100		$	—
Total net gains (realized and unrealized):
Included in other comprehensive income		1,850		—			950			—
Fair value at date of acquisition		—		—			—			(40,000	)
Settlements		—		10,000			(5,000	)		—
Balance at March 31	$	7,720	$	—		$	9,050		$	(40,000	)

        There are no gains or losses included in earnings for the three months ended March 31, 2012 and 2011, relating to the Company's assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs.

Auction rate security

        The Company's auction rate security is valued by discounting the estimated future cash flow stream of the security over the life of the security. Credit spreads and other risk factors are also considered in establishing fair value. The cost basis of the auction rate security is $10.0 million, with gross unrealized losses of $2.3 million and $4.1 million at March 31, 2012 and December 31, 2011, respectively. The unrealized losses are included in "Accumulated other comprehensive income (loss)" in the accompanying consolidated balance sheet. At March 31, 2012, the auction rate security is rated A/WR and matures in 2035. The Company does not consider the auction rate security to be other-than-temporarily impaired at March 31, 2012, due to its high credit rating and because the Company does not intend to sell this security, and it is not more likely than not that the Company will be required to sell this security, before the recovery of its amortized cost basis, which may be maturity.

Contingent consideration arrangement

        The fair value of the OkCupid contingent consideration arrangement at December 31, 2011 was based upon the achievement of the performance goals which required a $10.0 million payment.

Assets measured at fair value on a nonrecurring basis

        The Company's non-financial assets, such as goodwill, intangible assets and property and equipment, as well as equity and cost method investments, are adjusted to fair value only when an impairment charge is recognized. Such fair value measurements are based predominantly on Level 3 inputs.