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Phorm "still talking to British ISPs"

By Barry Collins

Posted on 21 Sep 2009 at 17:49

Phorm says it's still in talks with British ISPs, despite the enormous setbacks it suffered earlier this year.

The behavioural-advertising company remains characteristically defiant, despite reporting operating losses of $15 million (£9.2m) for the six months up to June 2009.

We remain in ongoing discussions with a number of UK ISPs and remain optimistic about our longer term potential in this market

The firm's chances of a full UK rollout were dealt a potentially fatal blow in July when BT shelved plans for a commercial rollout, prompting fellow ISP TalkTalk to pull out completely. Phorm's technology - which uses deep-packet inspection to tailor ads based on people's surfing habits - has been widely attacked by privacy groups, although BT flatly denied that privacy fears were behind its decision.

Phorm says it's not given up hope on BT and other British ISPs. "In the UK we announced on 6 July that BT had informed us that it had no immediate plans to deploy our service due to resource constraints," the company's interim results state.

"We continue to keep BT abreast of developments in our international markets as part of its evaluation of its plans with respect to interest-based advertising.

"Meanwhile, Carphone Warehouse, a partner with whom we had not conducted any trials, informed us of its decision to cancel its contract with Phorm. Virgin Media continues to examine behavioural advertising technologies, including Phorm. We remain in ongoing discussions with a number of UK ISPs and remain optimistic about our longer term potential in this market."

Financial strain

How long Phorm can continue to wait is another matter. Although the company has certainly stemmed its loses (it lost $25 million in the same period last year), the company continues to burn through money without any notable income.

At the time of publication, the company's share price stood at £150, down 10% today and a long way from it's 52-week high of £875.

Phorm claims it's making "significant progress in a number of major markets" across the world, although a trial in a Korea is as close as the company has come to a full deployment.

Nevertheless, CEO Kent Ertugrul says: "With a strong balance sheet, a talented and committed management team and technology that has been extensively tested by a variety of partners in different markets, the Board believes that Phorm is making good progress towards the milestone of commercial deployment in a major market, and the generation of meaningful revenues."

No more Phoul play

One thing the company has lost faith in, however, is it's Stop Phoul Play website. The website was set up to combat the alleged "smears" about the company's privacy record that Phorm claimed was falsely undermining its service.

Now, the website is merely redirecting back to the Phorm homepage.

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User comments

Sounds like a Phailure to me!

Any ISP would have to be deaf or insane to get into bed with Phorm.

It's a sure-fire method to have all your customers switch provider.

Would you buy a car from Ford (at no discount) that had advertising placards on it and with a sat-nav that told Ford everywhere you went? Nobody would. So why do Phorm think ISP customers would pay to have adverts shoved down their connections and all their browsing spied on? (At their cost and at the cost of their bandwidth).

Who needs to smear Phorm? Their business model does that on its own!

By cheysuli on 21 Sep 2009

Cash flow

"With a strong balance sheet" Losing $15 million in half a year does not sound very strong to me - Did his accountant work for Enron?

By greemble on 22 Sep 2009

Phorm just don't get it

Of course BT didn't cite privacy concerns as the reason for pulling back from a full roll-out. BT couldn't care less about it's customers privacy.

Nut BT's and every other ISP's customers care about their privacy.

If Phorm gets its foot in the door of one ISP, customers concerned by this jump ship to an ISP that isn't in bed with Phorm. ISP gains money from focussed advertising, loses money through loss of customers.

Hardly a good business model is it?

By agavinm on 24 Sep 2009

Maybe?

I wouldn't mind if phorm was used to subsidies cheap broadband connections so that less well off people who were fully aware of what they were signing up to could get affordable internet access.

However, I have this terrible feeling that if phorm ever gets established we are going to see the exact opposite. Every internet connection being spied upon by phorm, and only the wealthy being able to afford to subscribe to a non-phorm infested connection.

All that Phorm needs to do is to get a foothold with a company like BT or Virgin (My bet is that it will be Sky, as Merdock is that kinda guy), and we could see other companies being forced out of business in a price war because they couldn't compete on price terms with a company that had both subscription and ad revenues coming in.

By Perfectblue97 on 25 Sep 2009

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