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Phorm Raises Money

I've written extensively about behavioral advertising. It is important to track the actions of companies that promote and enable behavioral advertising, particularly the Deep packet Inspection (DPI) technology. Revolution Magazine reported:

"Phorm has raised £15 million through a stock sale to fund expansion plans in Britain and Korea. The company said the capital will be used ‘to continue the implementation of its service in the UK and Korean markets, and for general working capital purposes, as it continues partnership discussions with ISPs both in the UK and internationally."

Phorm developed DPI technology that allows Internet Service Providers (ISPs) to track everything their customers do online. The data is sold to media companies and advertisers so ISPs can supposedly serve up more relevant ads and make more money.

"Last year Phorm sold 1.61 million shares for £20 each - more than four times the value of the latest offering... Kent Ertugrul, chief executive of Phorm said the 3.3 million shares sold for £4.50 each, account for 19.4 per cent of the company, and were bought up by existing shareholders and new financial institute investors."

DPI goes far beyond the older tracking technologies, like Web browser cookies, which advertisers have traditionally used. Congress and consumers are right to take a long, hard look at firms using DPI. And, however favorable the FTC's proposed behavioral advertising guidelines are for corporations, those guidelines are not finalized.

My interest in this is not just the consumer privacy concerns, but the data security concerns due to the fact that company data breaches soared in 2008 compared to prior years. Too many companies don't take data security seriously enough.

Plus, ISPs play a key role in providing consumers with trustworthy access to the Internet. Even though NebuAd closed last month, Phorm is part of a larger situation where ISPs rush for advertising revenues and abuse consumer privacy.

Comments

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joe malley

Great article george.Waiting on your review of this week's BT hearings.

joe malley
malleylaw@gmail.com

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