Phorm shares plummet as BT puts Webwise on ice

 

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By Stuart Turton

Posted on 6 Jul 2009 at 08:49

Updated at 4:29pm: Shares in Phorm have tumbled by more than 40% after BT said it had "no immediate plans" to roll out its Webwise technology.

Opinion: Why BT might have finished off Phorm

BT's statement is a bitter blow to the behavioural-advertising service, especially given BT's strong early support.

The telecoms company carried out secret tests of the technology in 2006 and 2007, which are now under investigation by the EC. These were followed by full-blown public trials in 2008, after which the launch of the service seemed inevitable.

However, BT says it must now look at the best use of its resources, as it invests £1.5 billion in its fibre network. "We continue to believe the interest-based advertising category offers major benefits for consumers and publishers alike," says BT in a statement.

"However, given our public commitment to developing next-generation broadband and television services in the UK we have decided to weigh up the balance of resources devoted to other opportunities.

"Given these resource commitments, we don't have immediate plans to deploy Webwise today. However the interest-based advertising market is extremely dynamic and we intend to monitor Phorm's progress with other ISPs and with Webwise Discover before finalising our plans."

BT's cost-saving excuse is somewhat ironic, given that Phorm has consistently claimed that its Webwise technology would help boost ISPs' profits and spur investment in next-generation networks.

BT's decision not to roll out Phorm's Webwise service to its 4.7 million broadband customers is a heavy blow for the AIM-listed group, which has former Chancellor Norman Lamont as its chairman.

Last week Virgin Media also distanced itself from Phorm, claiming it was exploring other behavioural advertising services. "We continue to believe interest-based advertising has potentially important benefits for consumers, internet service providers and website owners," the company claimed in a statement.

"However, given the fast moving nature of the sector, Virgin Media intends to extend its review of potential opportunities with suppliers including Phorm prior to making any commitment to launch any of these technologies."

TalkTalk says its plans have not changed with regards to Phorm, though it claims there "is no fixed timeline for rollout" and that "if it does happen it will be opt-in".

A spokeswoman for Phorm says it's continuing to work closely with ISPs around the world and claimed there had never been any fixed timeline for a BT launch.