Note 11 - Stock-Based Plans

9 Months Ended

Sep. 30, 2012

Stock-Based Plans Disclosure [Abstract]

Stock-Based Plans

Stock-Based Plans

Stock Option Activity

The following table summarizes stock option activity for the nine-month period ended September 30, 2012:  

	Options
	(In millions)
Outstanding at January 1, 2012	40
Granted and assumed	2
Exercised	(13	)
Forfeited/expired/canceled	(2	)
Outstanding at September 30, 2012	27

The weighted average exercise price of stock options granted during the period was $36.52 per share and the related weighted average grant date fair value was $11.16 per share.

Restricted Stock Unit Activity

The following table summarizes restricted stock unit ("RSU") activity for the nine-month period ended September 30, 2012:  

	Units
	(In millions)
Outstanding at January 1, 2012	40
Awarded and assumed	18
Vested	(13	)
Forfeited	(4	)
Outstanding at September 30, 2012	41

The weighted average grant date fair value for RSUs awarded during the period was $37.13 per share.

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, 2012 and 2011 was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
	(In millions)
Cost of net revenues	$	13	$	14	$	41	$	43
Sales and marketing	35		32		99		100
Product development	34		26		101		91
General and administrative	40		36		119		112
Total stock-based compensation expense	$	122	$	108	$	360	$	346
Capitalized in product development	$	5	$	6	$	15	$	14

Valuation Assumptions

We calculated the fair value of each stock option award on the date of grant using the Black-Scholes option pricing model. The following weighted average assumptions were used for the three and nine months ended September 30, 2012 and 2011:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Risk-free interest rate	0.48	%	1.00	%	0.71	%	1.22	%
Expected life (in years)	3.8		3.7		4.0		3.8
Dividend yield	—	%	—	%	—	%	—	%
Expected volatility	40	%	39	%	38	%	38	%

Our computation of expected volatility is based on a combination of historical and market-based implied volatility from traded options on our common stock. Our computation of expected life is based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior. The interest rate for periods within the contractual life of the award is based on the U.S. Treasury yield curve in effect at the time of grant.