BT drops Phorm targeted ad service after customers cry foul over privacy
• Controversial online technology is dumped
• Group behind system in talks with overseas firms
* The Guardian, Monday 6 July 2009
BT has quietly ditched a controversial system that tracks the internet habits of its customers, developed by the technology firm Phorm, which has been attacked as online snooping by privacy campaigners. BT was a key player in the development of Phorm's Webwise system, which uses information about which sites an internet user visits to target them with relevant advertising on subsequent pages.
But BT has decided not to proceed with rolling out Webwise to its 4.8 million broadband customers, dealing a heavy blow to AIM-listed Phorm. The company, which has received complaints from customers about Phorm, said the decision was down to its need to conserve resources as it looks to invest £1.5bn in putting a next-generation super-fast broadband network within reach of 10 million homes by 2012. Privately, however, BT bosses have been increasingly concerned about consumer resistance to advertising based on monitoring users' online behaviour and specifically about the backlash against Phorm.
"We continue to believe the interest-based advertising category offers major benefits for consumers and publishers alike," said a spokesman for BT. "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.
"Given these commitments, we don't have immediate plans to deploy Webwise today. However, the interest-based advertising market is extremely dynamic and we intend to monitor Phorm's progress …before finalising our plans."
http://www.guardian.co.uk/business/2009/jul/06/btgroup-privacy-and-the-net