Peanuts to Profits With Thor Schrock
Peanuts to Profits With Thor Schrock

Yesterday Channel 8 News stopped by Schrock Innovations‘ Lincoln Service Center to talk about the Amber Alert that was issued yesterday for a 15 year old girl.

It seems she was playing Second Life and met a 30-year old man from New York.  He was nice enough to drive from New York to Nebraska to have “coffee” with her.

Luckily, the two were found in Arkansas.  It seems they had made plans to run away together.

Here are some tips for parents who are concerned about their kids on the Internet:

If you purchased a computer between 1999 and about 2003, you probably ended up with a nasty repair bill a couple years later.

The reason was a glut of capacitors that were manufactured in the gray market that contained a mix of electrolytes that was slightly off.  The result was capacitors that eventually bulged, popped, and leaked.  This would cause your computer to malfunction in any number of ways.

In our Service Centers at Schrock Innovations we have replaced many boards (mostly on 2005 and older E-Machines) that suffered from what became known as the capacitor plague.

Massive Desktop PC Failure

Owners of Dell computers are reliving some of those bad-old-days lately.  It seems that the capacitors on many Dell motherboards are going bad at an alarming rate.  Engadget is reporting that the failure rate for Dell computers is around 97%!

Most consumers who call with capacitor-related symptoms don’t really know why they are experiencing problems, so Dell’s technicians move the caller through the standard troubleshooting tree over and over as their warranty slowly ticks away.

The leaked documents explain that Dell is actively and intentionally telling their customer service representatives to ignore the capacitor problem:

The docs show that Dell asked customer service reps to deny there was any problem with their motherboards, telling them to pretend they’d never heard about the issue and to “emphasize uncertainty.”

These problems seem to be confined to Dell Desktop computers.  If you own a laptop you should be ok.  The only way to get your board replaced under warranty is to actually have a technician inspect your system looking for bulging, cracked, or leaking capacitors.

What Should I Do if I Own a Dell Desktop PC?

If you find one, call Dell’s technical support with your symptoms and then add “and I also have a leaking capacitor inside my computer.”  There is no way for their support representatives to deny you a motherboard is you KNOW it is bad and they know you are certain.

For a limited time at Schrock Innovations you can bring in your Dell Desktop system – whether it is in its Dell Warranty or not – and our technicians will inspect its capacitors free of charge.  If you have a bad one, we will check your warranty status and deal with Dell for you.

No appointment is needed.  Just drop your desktop system off – no cords or monitor required – and we will have it back to you usually within 1 day.

This morning an article ran in the Lincoln Journal Star newspaper stating that one of Schrock Innovations’ local competitors, QuickTEQ computers, is being sued by Microsoft for allegedly intentionally selling counterfeit Windows XP Professional products and improperly using Microsoft’s trade marks.

The basic outline of the story is that QuickTEQ sells a lot of refurbished laptops and Desktops.  According to the article, Microsoft detected QuickTEQ was selling copies of the company’s Windows XP Professional operating system in ways that did not conform with the company’s licensing rules.

Microsoft warned QuickTEQ with a letter, and later sent an undercover investigator to follow up and see if QuickTEQ was still improperly selling Windows XP Professional.

After the investigator returned his findings, Microsoft hired Omaha attorney Richard Jeffries to file a suit against QuickTEQ.

Exactly What Did QuickTEQ do Wrong?

That is hard to say at this point.  Microsoft’s licensing rules are complex in refurbished computer situations.  QuickTEQ sells refurbished computers that were sold coming off leases, at auctions, or in other situations when companies and government entities are done using them.

As a rule, when a computer is purchased and it has a copy of Windows pre-installed on it, that software is licensed under certain conditions.  For example:

• You can’t remove the hologram sticker and reapply it to another computer owned by someone else
• You can’t transfer ownership of the Windows Operating system without the manuals and the original hologram CD or recovery media
• You can not resell an Enterprise installation of Windows (big business copy) to a home user

The article doesn’t say exactly what QuickTEQ is accused of doing wrong, but I was personally really surprised to hear about Microsoft filing this suit.

QuickTEQ Was Reportedly Trying to Be Careful

I had heard through the grapevine that QuickTEQ had received a letter from Microsoft about licensing.  My understanding from my sources was that the company was taking the letter very seriously.

I spoke to a couple former QuickTEQ employees this morning and they reported that as employees they were aware the company received a letter from Microsoft and that QuickTEQ was “trying to be careful.”

What is Going to Happen Now?

In these situations, Microsoft is likely to ask for a temporary or permanent injunction against QuickTEQ to prevent them from selling any additional licenses.

According to the Journal Star, Microsoft is seeking information that will allow them to identify their exact monetary loss in the situation.  I am not certian if that means they want a tally of the number of licenses sold, or they want the information about who bought the licenses.

Generally, Microsoft does not go after individual consumers for buying counterfeit software.  They prefer to go after the players who they believe are putting the counterfeit software in the market for others to buy.

With that said, QuickTEQ has not told their side of the story yet.  They did not comment to the Journal Star, and are probably just learning about the suit as well.  QuickTEQ and its owner, Kevin Knudsen, are honorable staples in the Lincoln business community and I personally believe there is some misunderstanding here that will eventually be settled out of court.

How Can I Tell if My Software is Genuine?

Microsoft maintains a website that helps users determine if the Windows Software on their computer is genuine.  Here are a few of the key things from that website to look for so you can put your mind at ease.  Signs your Microsoft software may not be genuine:

1. You did not receive any documentation or manual with your software
2. Your computer does not have a holographic Windows sticker applied to its case
3. You did not receive a hologram disc or recovery media with your computer
4. Was the software properly licensed (home user buying Enterprise license for example)

I love Google.  I like Google’s innovation, their easy-to-use technology and the competition they bring to the marketplace.

But I don’t love Google sticking its nose into every corner of my life, recording every website I visit, every email and attachment I send, and tracking my GPS location through my cell phone.

I have been growing more protective of my privacy over the past few months, and Google’s recent WiFi spying revaluation has made me even more concerned.

While Google claims the spying was inadvertent I find it hard to believe that a whole team of data engineers looked at the raw amount of data that was collected and said, oh yeah…  that is just a bunch of WiFi locations.

Coming from a guy who was one mouse click away from buying a Nexus One phone from Google’s store, you might understand that I try to give Google the benefit of the doubt. But not any more.  It is time for rash actions.

Goodbye Gmail

The biggest intrusion into my life by far is Gmail. Like hundreds of thousands of others I eagerly agreed to let Google read my email, archive my attachments in Google Docs, and display relevant ads on which I have never clicked.  It seemed like a great deal.

By itself, it probably is.  However, if you have ever sent an email and regretted it, if you have ever attached the wrong document to an email, or if you have foolishly included credit card numbers or other personal it is all archived for eternity at Google – even if you delete your Google Account.  I am not ok with that.

For about $10 a month I got a private IMAP account from Rackspace.com and now all of my email moves through that IMAP in the same way it did before with Google.  My phone, desktop, and webmail are all synchronized in beautiful, silent privacy.  I love it.

Goodbye Google Toolbar

The next step it to uninstall the Google Toolbar and remove the Google Gears extension from my Firefox browser.

The Google Toolbar tracks every website your browser visits, and when cross-referenced with the pervasive cookie that is present on your computer when you log into any Google Service, the G-Master knows what web pages you look at, what you search for, what videos you prefer on YouTube, and even the data you place in certain forms on websites.

It is time for me to close that door of information as well.  I don’t plan on using many Google Services anyway, so Gears won’t be too much of a problem.

AdWords and AdSense

I am not ditching AdWords and AdSense and its not just the great money I make as an AdSense publisher or the customers I can attract to Schrock Innovations using AdWords.

AdSense and AdWords have a clear revenue model.  Google is buying and selling advertising.  It’s a marketplace where money is exchanged for advertising.

When you use Google’s free products you are trading your privacy for the use for the free product.  I am no longer willing to pay that price – especially when I can get similar services for such a small amount of money.

So Am I Paranoid or Just Realistic?

People I have talked to either think I am nuts that Google gives a damn about what I am doing in my computing time and others see the potential for privacy abuse in the future.

I am afraid of so much personal information being stored about me in one place because history has shown that in times of economic and political strife, private companies do things they would not ordinarily do.

Take it a step further…  Lets say a state or the Federal government decides they want to charge you retroactive sales taxes on everything you have bought using Google Checkout.  They can use the courts to FORCE Google to hand over their treasure trove of your personal information.

If you thinks that scenario is nuts, watch out – its already happening right now to Amazon in South Carolina.  See below from the Charlotte Observer:

Unable to get Amazon.com to collect the taxes, the state recently began an audit of online businesses, trying to track down what it assumes are millions of dollars in uncollected taxes. The state has told Amazon that it wants buyers’ names and the amounts they spent. That state also needs to know the general categories of spending, like books or movies or food, because some items are tax exempt. Amazon has refused to comply, claiming in federal court that North Carolina may be able to learn the titles of books and movies that its customers have bought, imperiling privacy and free speech. North Carolina officials have said they are not seeking those details. Now it is up to the court to decide whether Amazon will have to reveal the names of customers, without titles.

So would Google go to bat for you? Who knows.

You can’t trust Google implicitly because they are a business created to generate profits. In most cases protecting privacy is key to generating profits, but if governments demand a fat check from the G-Master OR the names of others to collect from, what do you think they would hand over?

ZDNet is reporting today that new research released by Dasient shows that as many as 1.3 million malicious ads are displayed to web surfers daily.  The bad ads break down into two categories – 59% percent of them are drive-by downloads and 41% were fake-alert security software scams.

This new method of infecting PCs is called malvertising, and it is on the increase.  Malicious attackers trick an ad network into running an ad that contains viruses or malware.  The ad is then displayed on legitimate websites like Fox News, CNN, and others.  Visitors get infected and if there is any blowback, it gets thrown at the website because most surfers don’t understand that its was the advertisement that nipped them

The research also indicated:

• The chances of getting infected from a malvertisement is 2x more likely on a weekend, and infected ads go undetected for up to 8 days on average
• 97% of Fortune 500 web sites are at a high risk of getting infected with malware through third party software providers like Java or Flash
• 69% of Fortune 500 companies use external Javascript and 64% of them are running outdated web applications

How Do The Bad Guys Trick Fortune 500 Companies?

The bad guys are posing as a legitimate company and tricking the advertising departments of legitimate media outlets to run the malvertisements.  That is why they run the ads on the weekend when no one at the big companies is paying attention.  For example, in September of 2009 the New Your Times got duped:

The creator of the malicious ads posed as Vonage, the Internet telephone company, and persuaded NYTimes.com to run ads that initially appeared as real ads for Vonage. At some point, possibly late Friday, the campaign switched to displaying the virus warnings. Because The Times thought the campaign came straight from Vonage, which has advertised on the site before, it allowed the advertiser to use an outside vendor that it had not vetted to actually deliver the ads, Ms. McNulty said. That allowed the switch to take place.

It Won’t Happen to Me, Right?  WRONG

If you plan on keeping safe by avoiding weekend surfing, don’t get too comfortable.

In another report recently released by Google’s Security Team, they stated that the fake-alert malware infections are now making up 50 percent of all malware delivered via ads.

In this month’s issue, Consumer Reports ranked security software.  The ONLY product that was able to protect your PC against malvertisements (malware infections) was Symantec’s Norton Internet Security and Norton 360 software.

NONE of the free security products protect your computer and MOST of the paid ones (including McAfee, Webroot, and Computer Associates) don’t get the job done either.  Overall, Symantec was ranked above all others.

What are you doing to keep your computer safe?  Have you been stung by one of these ads?

The KZKX morning show is one of the most highly-rated morning shows in Lincoln, so you can understand how THRILLED we were when Schrock Computer Company was featured during their show today!

Carol and Mick said some kind words about us as they introduced us to their listeners and kindly mentioned that we give a free hour of labor to all new customers so they can experience what real service feels like.

Have a listen to what they had to say about us!

Tim and the Animal took a couple minutes during the Morning Show today to throw a few kind words toward Schrock Innovations Computer Company.

We have done a LOT of work for Animal’s computers over the past few months and no matter what he sounds like on the air, he is one of the most good-hearted, caring person that I know.  Tim is a true tech lover and he and I would talk for hours about the latest cameras and audio technology if the boss wasn’t around to break it up.

Have a listen to what they said about Schrock on the air.  Thanks guys!

Schrock Innovations Computer Company was mentioned on the KFRX morning show today.

Over the past few months I have had the opportunity to get to know the KFRX staff and their show is awesome.

I have a special appreciation for the talent required to pull off a morning show, and after you  listen to how they wove Schrock into the content of their morning show, you will understand why!

Listen to what was said on KFRX

Omaha, NE is a very different beast from Lincoln, NE.  Everything is more expensive, less available, and more regulated.

Despite the challenges, Schrock Innovations is planning a massive expansion into Omaha in 2010.  Replicating what we have done in Lincoln for $850,000 we are planning to spend nearly $1.9 million to establish a presence in Omaha.

Didn’t Schrock Already Have an Omaha Location?

Schrock Innovations entered Omaha in 2004 with a small 1,500 sq foot expansion office on 84th and Maple Street.  We had a radio show on the lightly listened to KOMJ Magic 590 AM, and we managed to generate a profitable first year of operation with a light staff and a lot of small-ticket repair work.

In 2006, Magic 590 was flipped to an all-sports format and re-branded as Big Sports 590.  We lost our radio show, and with it the only means of marketing that we had cultivated in Omaha.

We tried to move to KKAR 1290, but after 6 months of radio we only had 2 new customers to show for it.  KFAB did not have any available air slots, so we cut our losses and killed the Omaha radio show.

From a financial perspective we should have rolled up the Omaha physical location right then and there.  From a moral perspective the right thing to do was to keep the store open to service the hundreds of warranties we had sold on new Modular PCs.

We tried to hedge our losses by locating our web development staff in Omaha and moving the location to a lower rent area on 93rd and Maple.

Our lease on that location expired in October of 2009, and our landlord had the opportunity to lease to a longer term tenant.  I was not willing to sign a long-term lease in that space, so we rolled up the location in November 2009 and went to 100% mobile service in Omaha.

What is Going to Be Different This Time?

In a word, everything.  The most basic barometer is money and the #1 reason our first entry into Omaha didn’t become a permanent fixture was capitalization.

On our original  expedition into Omaha we spent just under $200,000 and managed to cross break even on all start-up costs by mid 2007.  When we lost the radio show we did not have the time to develop and cultivate a new advertising medium while maintaining basic services.

This time we are entering the market with a few more factors on our side.  First, we are capitalized.  We are not borrowing one single penny to make this happen in Omaha.

Second, we have a primary and a secondary advertising medium developed and ready to launch.  One model should be enough to gain penetration rapidly, but if it fails or falls short, we have a backup plan that we have been testing successfully in Lincoln for months.

Third, we have a staffing plan that will allow us to add new people to our Lincoln Service Center and train them there and then move some of our existing employees into the new Omaha Service Center to assist and train our new Omaha staff.  This “culture graft” will help us maintain our normal service-focused edge as we bring in new people who may have been trained as technicians instead of service providers in the past.

When and Where Will it Be Opening?

We have narrowed our possible locations down to two possibilities – Village Point Mall at 168th and West Dodge Road, and The Shoppes at Legacy at 184th and West Center.

We are targeting September, 2010 as the opening date for the Service Center.

I will have more updates as we lock things in, but all in all this has been a VERY busy month and should be an interesting 4th quarter as well

This morning I was a guest on the Channel 10/11 News morning show.  We did two, three minute segments.  You can watch the complete interview about the iPad below.

We hit on some of the high points of the device, talked about its limitations, and whether or not it is a “must have” for students in school right now.