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Phorm delays internet trial

Phorm admitted on Thursday that preparations for the first major trial of its internet advertising technology had taken "longer than originally anticipated" but that it still expected deployments to go ahead with the UK's largest broadband providers.

Phorm's technology is placed within internet service providers' networks to monitor the sites visited by broadband users, in order to direct more appropriate advertising at them. Although Phorm said that the anonymity of broadband users is guaranteed, some consumer groups have expressed concern about a perceived invasion of privacy by tracking browsing behaviour.

Kent Ertugrul, Phorm chief executive, told the Financial Times that since announcing partnerships and trials with BT, Carphone Warehouse and Virgin Media, the UK's top three ISPs, it had conducted a "lengthy dialogue across a number of different fronts" with "outside parties".

"With the touchpoints and visibility we have, we can't afford to [deploy the technology] badly," he said. "What will be apparent after launch is what a large, complex project this is and how much preparation is required in order to execute flawlessly."

Phorm said that "significant and accelerating progress has been made" towards trials with BT, its first testing partner, but did not set a start date. In April, Phorm had said it expected consumer trials to begin "in the near term".

While Virgin and Carphone both reconfirmed their commitment to trial Phorm's technology, neither is expected to begin doing so until after BT has completed its testing. BT said it "still fully intended to carry out a pilot", branded as "BT WebWise", which will invite customers to volunteer for the trial.

Phorm also said that it had "experienced a significant level of commercial interest" in its main product from "other major ISPs, both in the UK and internationally".

One of Phorm's other offices is in the US, where Nebuad, a provider of similar technology, has recently faced controversy after trials with ISPs.

Mr Ertugrul said it would be "a mistake to commingle ourselves and Nebuad".

"This underscores the fact that the only path to success is through a high-quality, transparent offering that offers the highest standards of privacy and notice to users and the highest possible consultation before launch," he said.

Nebuad could not be reached for comment.

Phorm's shares, which have fallen 68 per cent in the past 12 months, closed up 22 per cent to 750p.

By Tim Bradshaw

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