TalkTalk kills contract with Phorm

 

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By Barry Collins

Posted on 8 Jul 2009 at 13:57

Phorm's chances of launching in the UK are dangling by a thread, after TalkTalk confirmed that it has cancelled its contract with the behavioural-advertising service.

BT set the chain of events running on Monday, when it unexpectedly announced that it had "no immediate plans" to rollout Phorm's Webwise technology, despite successfully completing public trials earlier this year.

That prompted Carphone Warehouse boss Charles Dunstone to announce that his ISP, TalkTalk, wouldn't rollout Webwise without BT.

Today, Phorm has confirmed that TalkTalk has cancelled its agreement, leaving the company in fresh turmoil.

Phorm hasn't commented on the reasons for TalkTalk's withdrawal, although the company's statement notes that "this relationship had not extended to any form of trial, in contrast to BT and some international ISPs."

Phorm's statement insists it still has agreements in place with BT and Virgin Media, although with BT taking a step back and Virgin publicly stating that it's considering alternative advertising services, the chances of Phorm completing a full commercial rollout in the UK look very slender indeed.

The company's entire business model is based on delivering millions of users to advertisers. The loss of TalkTalk, combined with BT and Virgin's reluctance to press ahead with a full launch, means that Phorm is currently unable to reach 70% of the UK broadband audience, even if it did manage to pull off deals with other British ISPs.

Phorm insists that its international prospects are brighter. "The company continues to make excellent progress and is actively engaged in more than 15 markets worldwide including advanced negotiations with eight major ISPs of which three are engaged in trials," the company states.

However, Phorm revamped its board at the start of the year to emphasise its focus on the UK, recruiting former chancellor Norman Lamont and Broadband Stakeholder Group chairman Kip Meek.

Investors have reacted badly to Phorm's UK troubles, with the company's share price now less than half of what it closed at on Friday.