Phorm shares plummet due to BT putting them on hold

Phorm, the controversial online advertising company, has watched its share prices plummet by 40 percent as BT made announcements that they had "taken a step out of Phorm". Although BT stated they were still interested in Phorm, the news of them taking a step back dropped their share price to 270p, according to an article by the BBC.

Although Phorm collects no personal data (including IP addresses), it has been criticised due to the way it stores copies of the pages a user visits, and later uses these in order to provide the user with relevant advertising.

BT, who previously carried out trials of Phorm's advertising products, has stated that the decision to put Phorm on hold was unrelated to the privacy issues that surround it, and more about "resources and priority."

Profiling is not something new – many search websites, including Google, create profiles of their users. However, the difference is that Phorm uses deep packet inspection to gather data from their users, and stores copies of the data that it gathers.

BT's decision resulted in the value of the company dropping by £35 million, according to The Press Association.
"We continue to focus considerable effort on faster moving overseas opportunities," Phorm said in a statement, mentioning that they are looking to South Korea and other markets, in order to reduce their dependency on particular countries and markets.

Since the BT trials which brought Phorm into the spotlight, several websites and ISPs have stated they will be either blocking or not using Phorm, some of which included Amazon and Orange.

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15 Comments

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Phorm ads are surely less relevant than current google ads... afterall you will get ads about what everyone else on the connection looks at, rather than the stuff on the page you are looking at. So I don't get why you would even consider it as a good way to advertise.

I'd be happy to either pay full price and get my crappy ADSL connection upgraded, or pay a cut price (if anything) for connection by ADSL, for opting into phorm. No deal otherwise, I value my privacy rather highly.