digital initiatives, and expansion of new and existing product categories, as well as technology infrastructure so that we can continue to enhance the customer experience, improve our process efficiency and support our infrastructure web services. See “Overview” above for a discussion of how management views advances in technology and the importance of innovation. We expect spending in technology and content to increase over time as we continue to add employees to our staff and add technology infrastructure. 

For the years ended 2008, 2007, and 2006, we capitalized $187 million, $129 million, and $123 million of costs associated with internal- use software and website development. Amortization of previously capitalized amounts was $143 million, $116 million, and $86 million for 2008, 2007, and 2006. 

A significant majority of our technology costs are incurred in the U.S. and most of them are allocated to our North America segment. 

General and Administrative 

The increase in spending in general and administrative in 2008 compared to 2007 and 2006 is primarily due to increases in payroll and related expenses, and professional service fees. 

Stock-Based Compensation 

SFAS No. 123(R) requires measurement of compensation cost for all stock-based awards at fair value on date of grant and recognition of compensation over the service period for awards expected to vest. The fair value of restricted stock and restricted stock units is determined based on the number of shares granted and the quoted price of our common stock. Such value is recognized as expense over the service period, net of estimated forfeitures, using the accelerated method. The estimation of stock awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from our current estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are revised. We consider many factors when estimating expected forfeitures, including types of awards, employee class, and historical experience. Actual results and future estimates may differ substantially from our current estimates. 

Stock-based compensation was $275 million, $185 million, and $101 million during 2008, 2007, and 2006. The increase in stock-based compensation is primarily attributable to an increase in total stock compensation value granted to our employees. 

Other Operating Expense (Income), Net 

Other operating expense (income), net, was $(24) million, $9 million and $10 million during 2008, 2007 and 2006. The increase in other operating income in 2008 compared to the comparable prior year periods is primarily attributable to the $53 million non-cash gain recognized on the sale of our European DVD rental assets, partially offset by increased amortization of intangible assets. Other operating expense in 2007 and 2006 was primarily attributable to amortization of intangible assets. 

Income from Operations 

Income from operations was $842 million, $655 million, and $389 million during 2008, 2007, and 2006. The increase in each year is primarily a result of increased revenue and gross profit relative to operating expenses. Additionally, 2008