we expect our technology and development expenses to increase in absolute dollars in 2008.

Marketing

The decrease in marketing expenses in absolute dollars in 2007 as compared to 2006 was primarily attributable to a decrease in marketing program costs, principally in television advertising and direct mail. In the second half of 2007, we lowered prices on our most popular subscription plans and decided to partially offset the cost of our investment in lower prices by reducing our spending on marketing programs. Subscriber acquisition cost decreased in 2007 as compared to 2006 primarily due to a mix of lower prices and more efficient marketing spending.

The increase in marketing expenses in absolute dollars in 2006 as compared to 2005 was primarily attributable to an increase in marketing program costs, which included direct mail, online advertising and television advertising, to attract new subscribers. Subscriber acquisition cost increased in 2006 as compared to 2005 primarily due to an increase in marketing program spending offset in part by a decrease in cost of providing free trials associated with our lower priced plans coupled with a slight decline in personnel-related costs.

We anticipate that our marketing expense will decrease in absolute dollars in 2008 due to more efficient use of our marketing dollars.

General and Administrative

The increase in general and administrative expenses in absolute dollars in 2007 as compared to 2006 was primarily attributable to an increase in personnel-related costs due to growth in headcount. The increase was also attributable to higher costs related to legal proceedings.

The increase in general and administrative expenses in absolute dollars in 2006 as compared to 2005 is primarily attributable to an increase in costs related to ongoing legal proceedings, personnel costs and professional fees to support our growing operations.

We expect that our general and administrative expenses will continue to increase in absolute dollars in 2008 in order to support our growing operations.

Gain on Disposal of DVDs

The increase in gain on disposal of DVDs in absolute dollars in 2007 and 2006 as compared to 2006 and 2005, respectively, was primarily attributable to an increase in the volume of DVDs sold, offset in part by an increase in the cost of DVD sales.

Gain on Legal Settlement

On June 25, 2007, we resolved a pending patent litigation with Blockbuster, Inc. As part of the settlement, we received a one-time payment of $7.0 million during the second quarter of 2007.

Interest and Other Income (Expense)

The increase in interest and other income in 2007 as compared to 2006 was primarily a result of our newly invested short-term investment portfolio which was higher yielding than our money market funds. Interest and other income (expense) consist primarily of interest and dividend income generated from invested cash and short-term investments. Interest and dividend income was approximately $19.7 million, $15.9 million and $5.8 million in 2007, 2006 and 2005, respectively.

The increase in interest and other income in 2006 as compared to 2005 was primarily due to higher interest income earned on our