[LINK] nick off Phorm

stephen at melbpc.org.au stephen at melbpc.org.au
Tue Jul 7 18:35:26 AEST 2009

With luck, Phorm will go broke. They developed deep packet inspection.

Phorm stranded as BT and Carphone pull plug on online ‘spying’ technology

by Elizabeth Judge 'The Times' July 7, 2009

The future of Phorm, the developer of controversial internet "spying" 
technology (deep packet inspection) looked increasingly uncertain last 
night after Carphone Warehouse joined the list of big-name clients 
shunning the service. 

Shares in Phorm slid 40 per cent yesterday after BT pulled plans to use 
the service, which tracks internet users and sends specially tailored 
advertisements to their screens based on their personal tastes. The 
decision followed a barrage of attacks from privacy groups. 

After BT’s move, Charles Dunstone, head of Carphone Warehouse, said: "We 
were only going to do it if BT did it and if the whole industry was doing 
it. We were not interested enough to do it on our own."

Virgin is also reluctant, meaning that Phorm, whose non-executives 
include Lord Lamont, the former Chancellor, has lost Britain’s three 
biggest internet groups, prompting analysts to question its future. 

(The Times Related Links: Wikipedia latest to reject Phorm technology)
Dan Cryan, head of broadband at Screen Digest, the research and 
intelligence consultancy, said: "It is never a happy position to be in 
when a company potentially loses most of its customers before it has even 
had a full commercial launch."

Phorm, which listed on the Alternative Investment Market in 2004, is one 
of a growing number of companies seeking to cash in on the trail of 
personal information that we leave behind on the internet. 

Its service is aimed at showing advertisements based on who is looking at 
a particular web page, rather than the content of the page itself. A car 
lover, therefore, could be presented with car adverts even if searching 
for flights. 

For internet service providers, it offered a potentially valuable new way 
of generating money from their subscribers. "Tailored" ads potentially 
reap 100 times more than traditional ads, according to some analysts. 

BT, Virgin Media and Carphone Warehouse’s TalkTalk had all signed up as 
partners in the service. Last year, however, Phorm came under fire when 
it emerged that BT had been conducting secret trials of its technology on 
36,000 of its broadband customers. 

Privacy groups said that the system was intrusive and even Sir Tim 
Berners-Lee, creator of the World Wide Web, condemned it: "I feel it is 
very important that my internet service provider supplies internet to my 
house like the water company supplies water to my house — connectivity 
with no strings attached," he said. 

Phorm insists that users are stored as a "unique random number" rather 
than a name, that it does not gather personally identifiable information 
and it does not store IP addresses. It said yesterday that its British 
ambitions remained intact. 

The company is hoping that BT will rethink its decision. However, a 
recently published report from its broker had already identified the next 
six months as critical for the company and its investors, who ploughed 
£32 million into the group last year. 

Phorm, which last year made a $48 million pre-tax loss after running 
trials in the UK and South Korea, said that it was focusing on 
opportunities abroad. "In so doing, we have already minimised our 
dependency on the deployment by any single ISP or in any particular 
market," it said. 



More information about the Link mailing list