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Stock-Based Plans (Tables)

9 Months Ended

Sep. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

The following table summarizes stock option activity for the nine months ended September 30, 2014:



	Options
	(In millions)
Outstanding as of January 1, 2014	14
Granted and assumed	2
Exercised	(4	)
Forfeited/expired/canceled	(1	)
Outstanding as of September 30, 2014	11

Schedule of restricted stock unit activity

The following table summarizes restricted stock unit ("RSU") activity for the nine months ended September 30, 2014:



	Units
	(In millions)
Outstanding as of January 1, 2014	34
Awarded and assumed	17
Vested	(12	)
Forfeited	(4	)
Outstanding as of September 30, 2014	35

Schedule of stock-based compensation expense

The impact on our results of operations of recording stock-based compensation expense for the three and nine months ended September 30, 2014 and 2013 was as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
	(In millions)
Cost of net revenues	$	19	$	9	$	56	$	45
Sales and marketing	46		38		133		112
Product development	57		42		167		120
General and administrative	51		51		132		135
Total stock-based compensation expense	$	173	$	140	$	488	$	412
Capitalized in product development	$	5	$	4	$	13	$	11

Stock option valuation assumptions

The following weighted average assumptions were used for the three and nine months ended September 30, 2014 and 2013:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Risk-free interest rate	1.27	%	0.77	%	1.19	%	0.62	%
Expected life (in years)	3.9		3.9		4.1		4.1
Dividend yield	—	%	—	%	—	%	—	%
Expected volatility	27	%	32	%	29	%	34	%

- Definition

Tabular disclosure of components of a stock option or other award plan under which equity-based compensation is awarded to employees, typically comprised of the amount of unearned compensation (deferred compensation cost), compensation expense, and changes in the quantity and fair value of the shares (or other type of equity) granted, exercised, forfeited, and issued and outstanding pertaining to that plan. Disclosure may also include nature and general terms of such arrangements that existed during the period and potential effects of those arrangements on shareholders, effect of compensation cost arising from equity-based payment arrangements on the income statement, method of estimating the fair value of the goods or services received, or the fair value of the equity instruments granted, during the period, cash flow effects resulting from equity-based payment arrangements and, for registrants that accelerate vesting of out of the money share options, reasons for the decision to accelerate.

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