Game Trust to aid social networking

Pacific Northwest

RealNetworks

RealNetworks agreed to buy New York's Game Trust so that customers can add social-networking functions to their sites.

Closely held Game Trust syndicates its Game Frame software so that media companies can create gaming communities, Seattle-based RealNetworks said Thursday. Terms of the deal weren't disclosed.

The Wall Street Journal reported Thursday that the purchase price is $20 million, according to people familiar with the matter.

RealNetworks makes software for distributing music, video and games. Its technology helps sites run multiple games and accommodate many players.

With Game Trust, RealNetworks' partners can add functions such as forums or instant messaging, and let users play against each other.

Starbucks

Bottled coffee to go abroad

Starbucks and PepsiCo said Thursday they would expand their bottled-coffee business into countries outside North America, with an initial foray into China.

The companies would not disclose financial terms or say what other countries are targeted, except that they could include those without Starbucks stores.

Gerry Lopez, president of Starbucks' Global Consumer Products Group, said the products would likely be in about four new markets, including China, within the next two years.

VAE Nortrak

South Seattle plant jettisoning 58 jobs

VAE Nortrak North America, a manufacturer of railway track and related equipment, will cut 58 jobs at its South Seattle plant, according to a layoff notice filed Thursday with the state Employment Security Department.

The company cited economic conditions for the layoffs, which will take effect in the first two weeks of December.

Nortrak bought the First Avenue South plant in November 2004 from Rail Products & Fabrications. It's one of eight manufacturing facilities in the United States and Canada owned by the company.

Nortrak is a subsidiary of voestalpine, an Austrian manufacturing group.

Nation / World

Commerce Dept.

New-home sales fall to 7-year low

New-homes sales tumbled in August to the lowest level in seven years, a stark sign that the credit crunch is aggravating an already painful housing slump.

Sales of new homes dropped 8.3 percent in August from July, the Commerce Department reported Thursday, driving them down to a seasonally adjusted annual rate of 795,000. That was the lowest level since June 2000.

The median sales price in August fell 7.5 percent from a year earlier to $225,700. That was the biggest drop in percentage terms in nearly 37 years.

KB Home

Homebuilder says slump to go into '08

KB Home, one of the nation's largest homebuilders, swung to a loss Thursday, citing a deep deterioration in the housing market and warning the sales slump will likely extend into next year.

KB's financial results were released the same day the Commerce Department reported new-home sales fell 8.3 percent last month from the previous month to the lowest level in seven years.

Los Angeles-based KB Home reported a loss of $35.6 million, or 46 cents per share, for the quarter ended Aug. 31, compared with a profit of $153.2 million, or $1.90 per share, in the year-ago period.

The company also said it took pretax charges of $690.1 million and $107.9 million to write down the value of unsold inventory and joint-venture holdings.

Freddie Mac

$50 million to be paid in settlement

Mortgage-finance company Freddie Mac will pay $50 million to settle federal charges that it fraudulently misstated earnings over a four-year period.

The Securities and Exchange Commission announced the settlement Thursday. Freddie Mac neither admitted nor denied wrongdoing in the accord but did agree to refrain from future violations of the securities laws.

Three former Freddie Mac executives settled the SEC's negligent-conduct charges by agreeing to pay a total of $265,000 in civil fines and to make restitution totaling $125,548.

An accounting scandal erupted at the government-sponsored company in June 2003 when it disclosed that it had misstated earnings by some $5 billion — mostly underreported — for 2000-2002 to smooth quarterly volatility in earnings and meet Wall Street expectations.

Currency

Dollar hammered by euro another day

The U.S. dollar dropped to a record low against the euro for a sixth consecutive session Thursday, sagging under expectations of a U.S. Federal Reserve rate cut next month.

The dollar has skidded to new lows against the European currency since the Fed last week cut interest rates by a larger-than-expected half percentage point.

The euro rose as high as $1.4189 Thursday, breaking its previous record of $1.4162 from early Wednesday. It later retreated to $1.4160 in late New York trading, up from $1.4136 late Wednesday.

American Airlines

Frequent-flier spinoff suggested

A major shareholder in AMG Corp. wants the owner of American Airlines to boost its stock price by spinning off the frequent-flier program and other businesses.

FL Group, an investment fund based in Iceland, said the AAdvantage frequent-flier program is worth $6 billion, and that a sale could produce a net gain of $4 billion. The stock market values all of American parent AMR at about $5.5 billion.

FL Group said it has an 8.25 percent stake in AMR, owner of the biggest U.S. air carrier. The fund's chief executive, Hannes Smarason, said FL Group contacted AMR directors after getting no indication that the company has a plan to boost the stock price. He added that AMR's recent comments about futures were "disappointing and surprising."

AMR said it valued opinions from shareholders but doesn't comment on discussions with shareholders or future plans.

The price of AMR stock has fallen nearly by half since mid-January, wiping out billions in shareholder equity.

Wal-Mart

More prescriptions join $4 generic list

Wal-Mart, the world's largest retailer, added 24 prescriptions to its list of $4 generic drugs, bringing the total to 361 as it tries to lure customers into its pharmacies.

Wal-Mart added treatments for glaucoma and acne. The reduced prices will be available for 157 medication compounds, Bentonville, Ark.-based Wal-Mart said Thursday.

Wal-Mart introduced the program, which offers a 30-day supply of common generic prescriptions, a year ago and rolled it out to all of its pharmacies two months later. Last week the retailer said it would offer employees a menu of more than 2,400 prescriptions for a $4 co-payment.

Citibankbank / Macy's

Unrequested cards will be sent out

Citibank, the nation's largest bank, is issuing 3.5 million credit cards to department-store customers who didn't request them — a step that consumer groups say raises privacy concerns and could expose consumers to identity theft.

This month, Citibank is sending general-purpose MasterCards to Macy's customers with credit-card accounts that have been inactive for two to four years. Citibank bought those credit-card accounts last year.

Citibank and Macy's describe the new cards as a way to "replace" inactive Macy's accounts.

"In my view, it's a privacy violation and a customer violation," says Mari Frank, author of "Safeguard Your Identity."

"Privacy builds trust. Lack of privacy destroys trust," he said.

Samuel Wang, a Citibank spokesman, says customers were notified about the cards in advance and must activate them to use them. Wang adds that even in case of fraud, customers wouldn't be liable for the charges.

Compiled from Seattle Times staff, Bloomberg News, USA Today, Reuters and The Associated Press