A very bad day at Phorm HQ as BT cancel trials

For a technology company days don't get much worse than those Monday's where your main route to market decides not to work with you any more! BT (British Telecom) has decided not to continue its work with Phorm, thus starving Phorm of its major route to the UK market.

I have been very vocal about Phorm, an ad network still to get up and running, but one that showed so much promise. The basic idea behind their technology is to monitor anonymous Internet packet traffic at the ISP level giving them sight of all your behaviour, thus being able to serve you the most relevant ads.

Targeting exists within advertising whether consumers know it or not, and Phorm actually stores less data than a regular ad-server.

However, amongst what I personally think is a catalogue of errors, Phorm did not address the balance between consumer reward (for opting in) against its own revenue potential. Consumers are smart and know a bad deal when they see it - downloading some free anti-virus/firewall type stuff is not a good deal in exchange for the millions Phorm will make from their own behaviours.

In the NY Times article that reported the news, BT claim they are not doing this because of privacy, but instead it has become a lower priority.

Whichever one of these you believe it comes down to that fact that BT don't think the potential return from this model is worth all the hassle, which may or may not include dealing with angry consumer groups.

The person who sent me the article originally used the subject line of "wah wah, buh bye phorm" and I wonder if this is such a major blow that they will indeed disappear. A 40% stock reduction signifies that they will have to evolve their story and fast in order to survive the media targeting world.