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Financial assets and liabilities carried at fair value on a recurring basis were as follows (in thousands):
For financial assets that utilize Level 1 and Level 2 inputs, we utilize both direct and indirect observable price quotes, including quoted
market prices (Level 1 inputs) or inputs that are derived principally from or corroborated by observable market data (Level 2 inputs).
15. Business Acquisitions
We account for acquisitions of businesses using the purchase method of accounting where the cost is allocated to the underlying net
tangible and intangible assets acquired, based on their respective estimated fair values. The excess of the purchase price over the estimated fair
values of the net assets acquired is recorded as goodwill.
Determining the fair value of certain acquired assets and liabilities is subjective in nature and often involves the use of significant
estimates and assumptions, including, but not limited to, the selection of appropriate valuation methodology, projected revenue, expenses and
cash flows, weighted average cost of capital, discount rates, estimates of advertiser and publisher tur nover rates and estimates of terminal
values.
During the years ended December 31, 2013 and 2012, we acquired businesses consistent with our strategic plan of acquiring,
consolidating and developing Internet media properties and applications and domain service businesses. In addition to identifiable assets
acquired in these business combinations, our acquired goodwill that primarily derives from the ability to generate synergies across our media
services.
On December 31, 2012, we completed the acquisition of the net assets of Name.com, a retail registrar company based in Denver,
Colorado.
In March 2013, we acquired Creativebug, an online destination for arts and crafts instruction based in San Francisco, California, for an
$8.0 million cash purchase price consideration. $0.8 million cash was held back by us to secure post-closing indemnification obligations of the
sellers and/or post-closing adjustments to the purchase price. Of the holdback, $0.4 million that is not subject to then-pending claims will be p
aid will be paid 9 months after the closing date, and the remainder of the holdback that is not subject to then-pending claims will be paid will be
paid 18 months after the closing date.
On June 20, 2013, we completed the acquisition of Society6, an online marketplace and e-commerce platform. The purchase price
consideration of $94.3 million was comprised of cash of $76.1 million and 2,322,880 shares of common stock valued at $18.2 million, based on
our stock price on the date of acquisition. $7.9 million i n cash and 243,902 shares of common stock were held back by us to secure post-closing
indemnification obligations of the sellers and/or post-closing adjustments to the purchase price. Any
F-29
Balance at December 31, 2013
Level 1
Level 2
Total
Assets:
Cash equivalents
(1)
$
4,034
$
-
$
4,034
Marketable securities
902
-
902
$
4,936
$
-
$
4,936
Liabilities:
Debt
$
-
$
96,250
96,250
$
-
$
96,250
$
96,250
(1)
Comprises money market funds which are included in Cash and cash equivalents in the accompanying consolidated balance sheet
Balance at December 31, 2012
Level 1
Level 2
Total
Assets:
Cash equivalents
(1)
$
29,129
$
7,940
$
37,069
$
29,129
$
7,940
$
37,069
(1)
Comprises money market funds which are included in Cash and cash equivalents in the accompanying consolidated balance sheet