e-mail campaigns, and other initiatives. 

Our marketing expenses are largely variable, based on growth in sales and changes in rates. To the extent there is increased or decreased competition for these traffic sources, or to the extent our mix of these channels shifts, we would expect to see a corresponding change in our marketing expense or its effect. 

Marketing costs increased in absolute dollars in 2007 compared to 2006 and 2005, due to increased spending in variable online marketing channels, such as our Associates program, sponsored search, and other variable marketing initiatives. 

While costs associated with free shipping are not included in marketing expense, we view free shipping offers and Amazon Prime as effective worldwide marketing tools, and intend to continue offering them indefinitely. 

Technology and Content 

We continue to invest in several areas of technology and content including seller platforms, web services, and digital initiatives, as well as expansion of new and existing product categories. We are also investing in 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. The growth rate of our technology and content spending decreased in 2007 compared to the prior year. We intend to continue investing in areas of technology and content as we continue to add employees to our staff and add technology infrastructure. 

For the years ended 2007, 2006, and 2005, we capitalized $129 million, $123 million, and $90 million of costs associated with internal- use software and website development. Amortization of previously capitalized amounts was $116 million, $86 million, and $50 million for 2007, 2006, and 2005. 

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 2007 compared to 2006 and 2005 is primarily due to increases in payroll and related expenses, and professional fees. 

Stock-Based Compensation 

As of January 1, 2005, we adopted SFAS No. 123(R), which 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