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Hardware vendor buys online service company, rolls out franchise support service

PC parts and hardware vendor GoldenRam turns into franchise support and services network.

GoldenRam Computer Products Inc. bought this week, turning the once-hot IT-professionals' recruiting site into an opportunity for a home-networking support franchise for GoldenRam., which was founded in 1997, allowed members to post resumes and skill sets so recruiters could search for the people and individual skills they needed. The company raised $97.5 million in function from venture capital companies and other investors, and burned through more than $75 million during the course of its almost nine years in business, according to Chris Zomaya, president of GoldenRam.

GoldenRam announced the acquisition this month, though Zomaya declined to describe the tems.

Part of was spun off into a home-PC-service organization that is now Best Buy's Geek Squad.

Zomaya, calling Geek Squad "a failed business model," intends to use the 977,000-person membership into a low-cost network of support technicians dispatched to install upgrades sold by GoldenRam online, or to do installs and on-site support coordinated nationwide by GoldenRam in Irvine, Calif.

The primary lead-generation mechanism is an application called UpgradeDetect, which GoldenRam partners can install on their own Web sites for the free use of customers. The software analyzes all the components of an end-user's machine and recommends upgrades of everything from the motherboard to the brand of random-access memory.

GoldenRam, which has sold "more than $900 million in upgrades over 19 years" exclusively through resellers and distributors, Zomaya said, sells the upgrades to the customer and posts the support ticket on an internal network.

The first GoldenRam service associate to pick up the ticket gets the job, Zomaya said.

It's not a typical channel business model, but is one with some promise, judging by market projections from Parks Associates in Dallas, Texas, which estimates that the number of homes with broadband services and data networks will be nearly 40 million by 2010.

And those networks will continue to grow more complex. Of the more-than-20 million homes with data networks already, only a third support more than one service (data, voice, multimedia). By 2009, 70% will support more than one, the company projects.

Parks Associates reports predict that growth will drive both the need for support, and sales of upgrades and network enhancements, exactly the market GoldenRam is addressing.

The worldwide market for consumer network storage will increase from its current nascent state of $305 million in 2006 to nearly $1.2 billion by 2011, according to ABI Research of Oyster Bay, N.Y.

"We encourage our service advisors to sell to homes, businesses, whoever they know," Zamoyan said. "Our pricing is 20% cheaper than the competition; we can get the product to them the next day and have someone install it at half the price of Geek Squad," he said.

GoldenRam currently works with IBM, Unisys and other national service providers, as well as a smaller network of its own service providers.

Zamoyan said GoldenRam will start recruiting members within the next couple of weeks, with the intention of launching the service as quickly as possible throughout the U.S. and Canada.

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