2010 10-K: Part II Development expense increased $10.8 million in 2010 after declin- ing $1.9 million in 2009. The increase in 2010 is mainly because of  higher salaries, bonus, and compensation-related expense for our  development teams. Development expense from recent acquisitions  also contributed to the increase, but to a lesser extent. We had  approximately 760 employees included in development expense as  of December 31, 2010 compared with 540 as of December 31, 2009.  In 2010, we capitalized approximately $0.8 million of operating  expense for software development, partially offsetting the increase.  The majority of the decline in 2009 was driven by lower bonus  expense, partially offset by incremental costs from acquisitions. Morningstar Stocks 500 , and  Morningstar ETFs 150 —and therefore  didn’t incur costs to promote these publications. Reduced spending  on travel, training, and conferences also contributed to the decrease,  but to a lesser extent. As a percentage of revenue, sales and marketing expense increased  about 2.2 percentage points in 2010, following a slight decrease in 2009. As a percentage of revenue, development cost was up slightly from  the same periods in 2009 and 2008. General and administrative (G&A) expense increased $9.2 million  in 2010 following a decline of $1.9 million in 2009. Bonus expense,  salaries, and other compensation-related expense contributed to  the increase in 2010, as did incremental expense related to acquisi- tions. G&A expense in 2010 also includes $2.0 million related to a  previously announced separation agreement between Morningstar  and the former head of Morningstar Associates. Sales and marketing expense increased $23.7 million in 2010, after  declining $9.9 million in 2009. Higher sales commission expense,  which rose $7.8 million in 2010, was the largest factor behind the  increase. Commission expense rose partly because of improved  sales activity. In addition, we recognized more expense in 2010  because of a change in our U.S. sales commission structure. Under  this new commission plan, we record the entire commission expense  in the quarter in which it is incurred. Under the previous commission  structure, we recognized the commission expense over the term of  the customer contract. Other costs in this category, including sala- ries and bonuses, and, to a lesser extent, advertising, marketing,  and travel, also increased. While most G&A expense rose in 2010, certain G&A expense  recorded in 2009 did not recur in 2010, including the $6.1 million of  operating expense related to adjusting the tax treatment of certain  stock options as well as $1.8 million of operating expense recorded  to G&A expense for the deposit penalty. Expenses related to liabil- ities for vacant office space were $2.2 million lower in 2010. In 2009, G&A expense decreased $1.9 million. Most of the decline  reflects lower bonus expense. Decreases in travel, training, and  conferences also contributed to lower expense in this area, but to  a lesser extent. These cost reductions were partially offset by the  operating expense related to the two matters mentioned above,  which contributed $7.9 million to general and administrative expense  in 2009. Approximately one-fourth of the increase in sales and marketing  expense was related to recent acquisitions. Sales and marketing expense decreased $9.9 million in 2009. Lower  bonus expense and advertising and marketing were the two largest  factors driving this change, with each contributing about 40% of  the decline. We reduced advertising and marketing from higher  levels in 2008 because of the challenging business environment. In  2009, we also discontinued three of the publications we previously  published in the first quarter of each year— Morningstar Funds 500 ,  As a percentage of revenue, G&A expense decreased 0.8 percentage  points in 2010 and increased 0.5 percentage points in 2009. General and Administrative Expense Sales and Marketing Expense ($000)  2010 2009  2008 General and administrative expense  $ 92,843 $ 83,596  $ 85,509 % change  11.1%  (2.2)%  8.1% % of revenue  16.7% 17.5%  17.0% Change  (0.8)pp 0.5pp   (1.2)pp ($000)  2010 2009  2008 Sales and marketing expense  $ 95,473 $ 71,772  $ 81,651 % change  33.0%  (12.1)%   18.6% % of revenue  17.2% 15.0%   16.3% Change  2.2pp (1.3)pp  0.5pp 76