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Summary:

Phorm is trying a reboot, redeploying its maligned ad-targeting technology to deliver content recommendations. Webwise Discover will still…

Phorm is trying a reboot, redeploying its maligned ad-targeting technology to deliver content recommendations. Webwise Discover will still use Phorm’s existing deep-packet inspection kit to analyse ISP customers’ browsing habits, but will show users a range of relevant web pages, not just adverts.

Phorm’s ad-targeting business has been trialled by BT (NYSE: BT) and South Korea’s SK but has so far failed to win ISP business, has faced a digital liberties backlash and is risking publisher opt-outs. So the company is making Discover the new centre of its offering. CEO Kent Ertugrul told journalists at a briefing on Wednesday: “Over the past year, we’ve talked a lot about how to make advertising more relevant and useful but… we’re here to talk about how to make the internet as a whole more useful to consumers.”

Phorm wants publishers to offer Discover through a widget, which would let them show related pages from either their own sites or from around the web. It’s also pitching at ISPs, who, apart from passing users’ traffic data to Phorm as before, would also get to host personalised landing pages for each broadband customer.

Consider Discover a sweetener. It’s these publishers whom Phorm had earlier pitched to deliver its targeted ads, and these ISPs whom it needs to do the tracking. Both camps have been hesitant on both counts but, if either can look at Phorm as a content recommendation vendor and not just an ad targeter, Phorm could be back in the game. And Discover could still be a Trojan Horse for Phorm’s ad business – despite serving content, the widget can also appear right in web banners and display boxes, for example.

Phorm’s website now sells the benefits of “a personalised and more interesting internet experience”, downplays the advertising aspect that has proved so controversial and runs a Populussurvey, commissioned by Phorm, that says 71 percent of 2,075 people polled are positive about the service. The likes of Zemanta and newswire aggregator Moreover, which powers BBC News’ third-party link feature Newstracker, also operate in the contextual recommendation space.

Will it work? Seven years on from Phorm’s inception, the company still describes itself as a pre-revenue start-up — in other words, it hasn’t made any money yet. And Discovery (NSDQ: DISAB) hasn’t changed that — until a real commercial ISP partner defies the public mood and signs a real revenue-generating deal a big question mark hangs over the entire company, the millions it has spent so far and the 140 staff it employs.

  1. And Discover could still be a Trojan Horse….

    I've got to give you an "A" for that one "Discover linked to the Webwise DPI system" is a real trojan inside the ISP network(s) :)

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