Why is CEO Philip Schoonover so optimistic he can revitalize the fortunes of money-losing Circuit City Stores? Perhaps he's counting on firedog to drag him out of the burning building that is the current downturn in consumer spending.

Circuit City launched the firedog service platform in fiscal 2007 to provide set-up of home theaters, installation of navigation systems in cars, and help for individuals experiencing trouble with their PCs and laptops. Consumer electronics products are getting so complex that many cannot handle these tasks on their own.

You can’t credit Circuit City with originality. Best Buy beat the City into the market with its Geek Squad. But so what? The City still sells a lot of big-screen TVs, GPS navigation systems and laptops, and firedog leverages the retail relationship into a service relationship. Insofar as this market has not been fully realized, firedog represents a growth opportunity.

According to a business intelligence report published by Companiesandmarkets.com, Circuit City expects revenues from firedog services to nearly double to over $400 million in fiscal 2008. The full report costs a bundle -- £265 -- and I have no intention of buying it, so I have no details.

But that one piece of data is suggestive. Insofar as Circuit City has already invested in the IT and personnel infrastructure to support firedog, a significant percentage of that extra $200 million in revenue should flow to the bottom line.

Meanwhile, Circuit City is opening a new store, this one in Manhattan, in its new, smaller "The City" format, according to PC Retail, To continue expanding during an economic slowdown when you've just reported a $62 million 2Q loss and stock bloggers are saying things like this, Schoonover is either totally deluded or he has an ace up his sleeve. Maybe firedog is his ace of spades.