Phorm Share Price Dives After BT Pulls Out

Shares in the contentious online advertising company Phorm have plummeted notably by more than 40 percent after BT notified that it had no “immediate plans” for using the company’s targeted advertising technology.

The advertising firm Phorm has drawn severe criticisms from privacy enthusiasts for creating an online network that connects ISPs, advertisers, as well as online publishers to dish up targeted adverts to the users based on their internet habits.

BT has already been suffering significant losses of late, reporting £1.3 billion in losses for the first quarter of the year after considerable contract write-downs, and thereby the telecom operator asserted that it is focussing hard on developing next generation broadband.

Citing the same, BT said in a statement, “However, given our public commitment to developing next-generation broadband and television services in the UK, we have decided to weigh up the balance of resources devoted to other opportunities”.

Phorm’s controversial technology faced users’ wrath following reports that BT conducted a couple of trials using the company’s technology without asking users’ for their consent back in 2006 and 2007.

After facing troubles in the UK, Phorm said that it is now targeting on its business overseas, and has made noticeable progress in South Korea. “We are engaged in more than 15 markets worldwide, including advanced negotiations with several major internet service providers (ISPs)”, the advertising firm added.

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Our Comments

Phorm adoption appears to be a no-no for internet service providers for now. In the hindsight, Phorm's problems stemmed from the initial mistake BT made by enrolling its own customers on a trial basis. Had this not happened, Phorm might have thrived under the radar and implemented by BT as Webwise.

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