Phorm Loses U.K. Partner BT, Turns to Overseas Markets

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U.K. Internet service provider British Telecom has officially announced it will not roll out technology from behavioral targeting technology provider Phorm. Although none of the firm's current U.K. ISP partners seems keen to actually implement the technology, this is the first official announcement to that effect.

BT said it simply isn't willing to dedicate the resources necessary to fully implement the technology, and that it was focusing on other priorities such as speedier networks. "Given these resource commitments, we don't have immediate plans to deploy Webwise today," the company said in a statement this morning. In reality, though, backlash from its customers, E.U. regulators, and privacy advocates is also likely to have influenced that decision.

The news will come as a major blow to Phorm. BT appeared to be the customer most likely to adopt its behavior tracking and ad targeting technology, having already carried out numerous trials of system. Although Phorm is in discussions with other major U.K. providers, none appear to be anywhere near deployment, and many have either shunned the firm completely, or suggested they are unlikely to make use of the platform.

In a response to BT's decision, Phorm said it will continue to seek ISP customers in the U.K., but that it is now focusing "considerable effort on faster-moving overseas opportunities." Korean ISP, KT, launched a large-scale trial of the technology in March, and the company claims to be "engaged" in 15 global markets with "advanced negotiations" currently underway with several major ISPs.

To further enhance its proposition for consumers and prospective ISP partners, Phorm alsoannounced the availability of a consumer-facing content recommendation service last month.

By the admission of CEO Kent Ertugrul however, the company is yet to actually sell any ad inventory at all, even in Korea, raising questions as to how long it can continue to operate without a revenue stream. According to Nick Barnet, Phorm's U.K. managing director, reception from agencies both in the U.K. and abroad remains positive.

Keeping its options open, BT added that it intends to "monitor Phorm's progress with other ISPs and with Webwise Discover before finalizing plans." BT "continues to believe the interest-based advertising category offers major benefits for consumers and publishers alike."