Phorm loses $1m a week

 

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By Barry Collins

Posted on 19 Jun 2009 at 09:50

Controversial web advertising firm, Phorm, lost almost $1 million a week in 2008.

The firm's operating losses for the 2008 financial year were $49.8 million (£30 million), according to Phorm's financial statement.

It's currently impossible for the company to make a profit, because it doesn't have any revenue coming in. Although the firm has three deals signed with British ISPs - BT, Virgin Media and Carphone Warehouse - all three have yet to roll out Phorm's Webwise technology.

Nevertheless, the $7 million Phorm spent on research and development in 2008 and the staggering $42 million on staff and administration costs has raised eyebrows.

The firm has promised to scale back on its expenditure, according to a report in the Financial Times. The firm has shed a quarter of its staff, while senior management have agreed to take cuts in their salary.

Phorm's non-executive board includes former Chancellor Norman Lamont and Kip Meek, a close associate of Communications Minister Lord Carter.

The company last week announced that it had secured an additional £15 million of funding from an over-subscribed share issue.

However, the growing losses will crank up the pressure on the company to secure a full deployment. Phorm's financial statement admits that "considerable time has elapsed between announcements with our [UK] ISP partners" but that "much work continues in the background".

The company has said it's talking to other ISPs, both in the UK and worldwide. It's only current commercial deployment is a public trial in Korea.