British ISP Orange will not use Phorm

British mobile operator and ISP Orange will not use behavioral targeting technology from Phorm to track its subscribers' Web activity and deliver ads to them.

In a statement e-mailed to ClickZ News, an Orange spokesperson said, "As a network provider, we are very close to our customers and as a result are trusted with their personal information. We take this responsibility extremely seriously and it is our policy to be clear and transparent on how this data can be used, without compromising privacy."

The spokesperson did not discount the use of behavioral targeting technology entirely, stating, "We are open to finding new ways of using data that will provide value to our customers and to advertisers alike."

Speaking to the Financial Times, Paul-Francois Fournier, SVP of Orange's online advertising division said, "We have decided not to be in Phorm. The way it was proposed, the privacy issue was too strong."

Phorm remains adamant that its systems are legal and ethical, a view that was seemingly echoed by the U.K.'s Government Department for Business, Enterprise and Regulatory Reform last month.

Phorm signed deals with three of the U.K.'s largest Internet Service Providers - BT, TalkTalk and Virgin Media -- in March, and has claimed to be "in talks" with other ISPs for months.

In the U.S., trials of similar technology from rival firm NebuAd were abandoned by ISPs following scrutiny from U.S. regulatory bodies and privacy advocates. NebuAd currently operates a U.K. office, headed up by ex-Tacoda managing director Paul Goad, but has yet to announce any official activity in the U.K. market.

Now, following the departure of its CEO in September, it appears the firm is rethinking its offering. A recently re-designed Web site suggests that its ISP-level technology will now take a back seat to more traditional methods. Specifically, the company intends to create user profiles by collecting data through a network of partner sites in a manner similar to that of Tacoda, Revenue Science and other behavioral ad networks.

In September, NebuAd admitted it was seeking to "broaden its market via more conventional media channels and means." It added, however, that "servicing Internet service providers remains a priority," and that it is "enhancing technologies in that area."

Although the new site does not refer quite as explicitly to its ISP-partnering intentions as its earlier marketing efforts, it still touts an offering for communication providers as the "most effective solution for achieving stronger revenue growth via [a] market-leading advertising system."

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