March 26, 2010 2:21 pm

Phorm wins ad-tracking deals in Brazil

Phorm, the behavioural advertising company, which was prevented from launching in its native UK because of controversy over its tracking methods, announced contracts with five internet service providers in Brazil.

Shares in the Aim-listed company rose as much of 15 per cent on Friday morning, after the company said it had secured $5.6m in pre-booked revenue from advertisers, the first sales it has recorded.

The shares had lost about 90 per cent of their value since 2008, after the company was forced to abandon its UK launch plans.

Phorm is to roll out the advertising service across Brazil with five internet service provider partners – Estadão, iG, Oi, Terra and UOL – and said it expected to announce further ISP deals in due course.

The company tracks the pages internet users visit and uses the information to show them advertising that is tailored to their interests.

Phorm has proposed this as a way for media companies to make more money from displaying advertising on their internet pages and to be less dependent on the advertising networks run by companies like Google and Yahoo.

Although Phorm’s tracking is done anonymously, the service angered digital liberties campaigners and sparked a furious backlash in Britain.

UK internet service providers Virgin Media, TalkTalk and BT, which all had plans to launch the service, eventually decided against going ahead.

Kent Ertugrul, founder and chief executive of Phorm, said: “Our commercial deployment in partnership with many of Brazil’s leading internet players reflects the many lessons learnt from experiences in other markets.”

The company has sought to make the service more appealing to consumers by offering them content targeted to their interests as well as advertising. The product is being launched in Brazil under the name “Navegador”.

Phorm has also completed two trials of the service in South Korea, but roll-out in the country has been slower than expected.

Mr Ertugrul said Phorm was “active in almost every other major internet market worldwide,” but did not mention any other countries specifically.

In the UK, the Crown Prosecution Service is still considering whether to pursue a criminal case against BT for conducting trials of the Phorm technology without pre-warning customers.

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