We seek to efficiently invest in several areas of technology and content including seller platforms, 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 AWS. See “Overview” for a discussion of how management views advances in technology and the importance of innovation. 

The increase in technology and content costs in absolute dollars in 2010 and 2009 compared to the comparable prior year periods is primarily due to increases in payroll and related expenses and increased spending on technology infrastructure. We expect these trends to continue over time. 

For the years ended 2010, 2009, and 2008, we capitalized $213 million, $187 million, and $187 million of costs associated with internal- use software and website development. Amortization of previously capitalized amounts was $184 million, $172 million, and $143 million for 2010, 2009, and 2008. 

A majority of our technology costs are incurred in the U.S., most of which are allocated to our North America segment. Infrastructure and other technology costs used to support AWS are included in technology and content. 

General and Administrative 

The increase in general and administrative costs in absolute dollars in 2010 and 2009 compared to the comparable prior year periods is primarily due to increases in payroll and related expenses, and professional service fees. 

Stock-Based Compensation 

Stock-based compensation was $424 million, $341 million, and $275 million during 2010, 2009, and 2008. The increase in stock-based compensation in 2010 compared to 2009 is primarily due to an increase in total stock-based compensation value granted to our employees and to a decrease in our estimated forfeiture rate. The increase in stock-based compensation in 2009 compared to 2008 is primarily due to a decrease in our estimated forfeiture rate. 

Other Operating Expense (Income), Net 

Other operating expense (income), net was $106 million, $102 million, and $(24) million during 2010, 2009 and 2008. In 2010, the amount primarily related to amortization of intangible assets, in 2009, the amount included amortization of intangible assets and a $51 million legal settlement, and in 2008, the balance included amortization of intangible assets and a $53 million noncash gain on the sale of our European DVD rental assets. 

Interest Income and Expense 

Our interest income was $51 million, $37 million, and $83 million during 2010, 2009, and 2008. We generally invest our excess cash in investment grade short- to intermediate-term fixed income securities and AAA-rated money market funds. Our interest income corresponds with the average balance of invested funds and the prevailing rates we are earning on them, which vary depending on the geographies and currencies in which they are invested. 

The primary component of our net interest expense is related to our capital and financing leases and our long-term debt. Interest expense was $39 million, $34 million, and $71 million in 2010, 2009, and 2008. The decline in 2009 primarily relates to