Phorm, the firm which specialises in tracking online behaviour of web users, saw its shares dropping sharply today in light of the announcement from BT that it has not plans for using the firm’s services in near future.
It is interesting to recall that BT’s decision to consider rolling out its Webwise Discover service - which is based on Phorm’s technology - was met with stringent protests from privacy groups. They extensively campaigned against the plan which seriously compromised the privacy of web users.
With BT now categorically stating that it has no immediate plans for rolling out the service, the future growth prospects of Phorm in the short run do seem to be positive and the near 30 percent drop in its share price reflected the sentiments in the market about the company.
However it seems Phorm is not considering the decision from BT as final and its spokeswoman in a statement mentioned "They're not saying the roll out won't happen. We're very confident we're going to be able to deliver substantial growth and shareholder value in the coming years,"
Some analysts believe that Phorm can still overcome the temporary setback as it is in talks with several other ISPs and the technology it offers is too lucrative for marketing on the internet to be ignored for long.
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Phorm is on a dangerous slope and it seems that BT cannot afford the risk of alienating customers in these difficult times. Other networks are keen to find out whether adopting Phorm or any similar technologies might bring in more revenues to offset any customer losses. The problem though is that someone has to go first to test the waters and that someone is unlikely to be BT.
(Long Evening Standard)
(Wall Street Journal)