Phorm (News - Alert), formerly known as 121Media, is an online behavioral targeting advertisement technology company based in New York, London and Moscow. The company has been attempting to line up deals with some UK-based ISPs to deliver targeted advertising based on a user's browsing habits by using deep packet inspection. The idea is that your click stream data can be stored, analyzed, and used to target ads to you and place them on your browser as you surf a website that has signed up with Phorm. That is, if you were surfing an automotive site and then visited Fox News, the system, now knowing that you have an interest in automobiles, would place automotive-related ads in your field of view (if the Fox News site signs up with Phorm). Thus, the ISP gets to keep pretty good tabs on what a user does on the Web, then uses it to make money via targeted ads.

 

It’s been reported that more than 10 million customers of U.K.'s three largest ISPs (BT (News - Alert), Virgin Media and Carphone) will have their Web browsing habits sold to Phorm. The data will be fed into the Phorm’s advertising network, the Open Internet Exchange, where advertisers will pay to target groups with particular interests (automobiles, soccer, tennis, etc.). In return, the ISPs will receive a portion of the revenue (industry analysts estimate that BT's cut will be £85m in 2010).

 

Oh, did I forget to mention that the previous incarnation of 121Media was categorized by many industry experts and pundits as a spyware company?

 

Phorm claims that they will keep all of the collected data  “anonymized” and by changing a small text data file called a ‘cookie’ stored on a user’s disk drive, the user can opt-out of the whole Phorm experience. Of course, most software security firms say that their anti-malware, anti-advert software may label Phorm cookies as “adware” and therefore block them.

 

Symantec, Trend Micro (News - Alert) and McAfee have been quoted as saying that they would monitor Phorm as it rolls out and will then determine how the Phorm cookies behave out in the real world and whether the public should be warned about them.