Pacific Northwest Local investment firm The Sienna Group will pay $40 million for a stake in Freestone Capital Management, a Seattle-based...

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Pacific Northwest

Local investment firm The Sienna Group will pay $40 million for a stake in Freestone Capital Management, a Seattle-based wealth and asset manager, the two companies said.

Freestone, which ranks among the 30 largest independent U.S. wealth-management firms, plans to add a second West Coast office and look at other expansion options.

It manages investments for individuals and families with liquid assets of $2 million to $100 million.

Freestone’s management team and employees will remain. Founder Gary Furukawa will continue to own a significant stake in the firm and serve as its chairman and chief investment officer.

Costco

New call center slated for Yakima

Issaquah-based Costco Wholesale, the warehouse-club giant, will open a telephone call center in the former HouseValues building in Yakima, Costco CEO Jim Sinegal said Thursday.

The plan is to hire local employees, Sinegal said in an interview. But he said he couldn’t be more specific about how many jobs might be created or when the center would open.

Costco is outgrowing its Issaquah call center, which has about 260 employees. “As we add, we thought it might be good to have something out there,” Sinegal said. The Issaquah facility will stay open.

HouseValues, a Kirkland-based online real-estate services company, closed its Yakima operation last year, laying off 100 employees.

Amazon.com

Sony BMG joins MP3 music store

Seattle-based Amazon.com said Thursday it will add a fourth major music label to its MP3 digital music store later this month.

Sony BMG Music Entertainment joins Warner Music, Universal Music Group and EMI Music in making its roster of artists available without digital rights management (DRM) software at Amazon’s online store.

Amazon launched the MP3 store in September and now offers more than 3.1 million songs.

Amazon said the addition of Sony BMG will make it the only retailer to sell MP3 downloads without DRM software from the four major labels.

Microsoft

Takeover rumors boost Yahoo stock

Yahoo stock surged $1.53, or 6.8 percent, to $24.09 on renewed speculation Microsoft may be interested in acquiring the owner of the most-visited U.S. Web site.

Microsoft is debating whether to go public with an informal offer made for Yahoo last year, the New York Post reported Thursday, citing unidentified sources close to Microsoft.

Cowen & Co. analyst Jim Friedland, commenting on the Post story in a note to investors, said: “We put the odds of an acquisition at 25 percent or less.”

Yahoo declined to comment. A phone call to a Microsoft spokesman was not returned.

T-Mobile

Capital spending to cut profit growth

Germany’s Deutsche Telekom, Europe’s largest telephone company, said investments in its U.S. mobile-phone unit will hurt profitability growth at the division in the next two years.

Spending on networks and to start faster wireless services will prevent the profit margin from reaching a “mid-30s” percent target, T-Mobile USA Chief Executive Officer Robert Dotson told a conference in Phoenix Wednesday.

The fourth-largest U.S. wireless company, which is based in Bellevue, has budgeted about $10 billion in capital spending in the three years through 2009.

Rene Obermann, Bonn-based Deutsche Telekom’s chief executive officer, is expanding T-Mobile to make up for more than four years of declining fixed-line phone revenue in Germany.

Microsoft

Library of Congress deal expands access

Microsoft struck an agreement with the Library of Congress to make more collections and exhibits available through the Web.

The company also will help create interactive kiosks at the library’s Thomas Jefferson Building in Washington, D.C., so visitors can have a closer look at items such as the rough draft of the Declaration of Independence and the Gutenberg Bible, a statement said Thursday.

Microsoft has formed partnerships with libraries at Yale and the University of California, digitizing their collections and putting them online, as rival Google bolsters its own Internet-based book-search program.

Nation and World

Capital One

Stock plummets on profit warning

Capital One Financial said its 2007 earnings will fall short of its previous expectations, sending its stock to a new 52-week low and reaffirming that turmoil in the nation’s credit markets continues.

The credit-card company said Thursday that increased loan delinquencies and additional legal reserves in the fourth quarter would result in a fourth-quarter profit of 60 cents a share and full-year earnings of about $3.97 a share, below its prior forecast of “about $5 per share.”

The news, announced early Thursday, confirmed fears by some analysts that the collapse of the subprime mortgage market has hurt other credit classes.

Capital One is to report fourth-quarter results Jan. 23.

Delta Air Lines

Merger rumors send shares flying

Shares of Delta Air Lines soared more than 18 percent Thursday following renewed speculation that the nation’s No. 3 carrier may be close to inking a deal to combine with another airline.

Delta’s board will be asked today to allow formal merger talks between Delta and Northwest and United, with the idea that Delta would ultimately choose to combine with one of the two, people familiar with the situation told The Associated Press on Thursday on condition of anonymity because of the sensitivity of the talks.

Delta spokeswoman Betsy Talton declined to comment.

Reached on their cellphones, two of Delta’s directors — John Brinzo and Paula Rosput Reynolds, who is CEO of Safeco — also declined to comment.

The head of the company’s pilots union said Wednesday in a letter to union members that a combination involving Delta may be close.

Also Thursday, shares of United Airlines soared nearly 24 percent after an industry analyst upgraded the company, citing the appeal of its lower stock price.

Speculation that Delta might undertake a combination with another airline also was seen as fueling the surge.

BofA / Countrywide

Smart money bets on buyout approval

A buyout of hobbled mortgage lender Countrywide Financial likely would be approved by regulators, analysts say, because otherwise the company could file for bankruptcy, injecting further uncertainty into the home-loan market.

Bank of America is in talks to acquire Countrywide, The Wall Street Journal and The New York Times reported Thursday online, citing unidentified people familiar with the deal.

The transaction would put the country’s largest mortgage lender in the hands of the largest U.S. bank by market capitalization.

Countrywide has had a surge in home-loan defaults and seen its share price plummet.

A Bank of America-led buyout is “the one and only hope that [Countrywide] has” to avoid bankruptcy, according to Sean Egan, managing director of independent ratings firm Egan-Jones Ratings Co.

Egan-Jones warned earlier this week that Countrywide could “falter” unless it receives an infusion of $4 billion in capital within the next two weeks.

Also, shares of Seattle-based Washington Mutual, its largest rival lender, advanced $1.82, or almost 15 percent, to $14.16 in Thursday trading.

Intel

Cuomo subpoenas Intel pricing data

New York Attorney General Andrew Cuomo is investigating possible violations of state and federal antitrust laws by Intel, the world’s largest manufacturer of computer microprocessors.

A Cuomo spokesman said subpoenas were being delivered Thursday seeking information on whether Intel coerced customers to exclude rival Advanced Micro Devices (AMD) from the market for a specific computer processing unit.

Cuomo said his preliminary review showed a need for a full investigation.

The subpoenas seek data about Intel’s pricing strategies and whether Intel penalized computer makers, cut off competitors’ distribution channels and improperly paid customers for exclusivity.

Intel said it hasn’t broken any laws and believes the legal moves are driven by AMD.

Compiled from Bloomberg News, the Los Angeles Times and The Associated Press

Seattle Times business staff, Yakima Herald-Republic and Bloomberg News