Virgin may be last British hope for ad snooping firm Phorm
Phorm, the firm behind a controversial advertising system which gathers data from visits to all Web sites, may find a new customer in British cable giant Virgin. It’s only a possibility at this stage, but will be welcome news for the firm after its stock price slumped by more than half when Britain’s two largest ISPs ditched its service.
The service, Webwise, involves collecting data through an internet service provider rather than through a specific Web site. By tracking all the sites a user visits, the idea is to provide much more relevant advertising. The problem is that there are ongoing legal arguments about whether such activity is allowed without getting specific advance permission from the internet user.
Earlier this week British Telecom, which had previously tested the scheme without informing the customers involved, announced it had no immediate plans to use Webwise. Today Carphone Warehouse, which markets its broadband service under the name TalkTalk, said it had ended a relationship with Phorm. The two firms had been in talks but had not reached the point of running a trial.
The double-whammy hit Phorm hard on the British stock market, with it’s share price having dropped 56 percent since Monday at the time of writing.
There is one bright spot for the company: the Dow Jones agency reports that Virgin, Britain’s dominant cable firm, is still considering using WebWise. Virgin is quoted as saying that if it did sign up to the scheme, it would communicate clearly with customers and fully comply with the principles agreed among British online advertisers earlier this year. These include giving notice when collecting data for targeted adverts; giving users a choice about whether their information is collected; and educating users about how the data will be used.
Even if Britain proves a dead end for Phorm, it may still have success elsewhere. The firm says it is talking with internet companies in 15 other countries and has already done a deal in South Korea.
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