Rory Cellan-Jones

Phorm's phlat product launch

  • Rory Cellan-Jones
  • 3 Jun 09, 16:09 GMT

A few weeks back the controversial web-tracking behavioural advertising firm Phorm got in touch to invite me to a press launch.

Hand and computer mouse, EyewireThe company promised a "new and groundbreaking consumer proposition." I was intrigued - was a company which had fought without success to get ISPs to accept its Webwise product, against a background of furious opposition from privacy campaigners, finally going to get it off the ground?

So I turned up this morning to Phorm's launch at a ritzy Covent Garden location full of anticipation. On the face of it, the product they were showing off seemed reasonably impressive.

Webwise Discover is described as a "widget" which will allow visitors to any website to find content relating to their interests, as shown by their previous web activity. It will be free to the customers of ISPs who sign up, and to websites which want to use it.

So you might go to a newspaper website to read a sports story, and find that you were also directed to a story about wine, because you'd shown a previous interest in the subject. The product seems to be a kind of automated version of Google, delivering results as you browse even before you've bothered to search.

Now Phorm has been controversial for two reasons - the "deep packet inspection" technology which privacy campaigners claim makes the firm uniquely intrusive, and the fact that it isn't clear whether consumers will be allowed to make an informed choice about whether they want to use the service.

The same technology will be employed in Webwise Discover, but Phorm says this will be a purely optional service, offered to customers only if they want it. The company showed us a video of "vox pops" with people on the street, all hugely enthusiastic about the possibility of using this service.

They also unveiled an opinion poll showing 71% of those questioned liked Discover, and 81% liked it when the Webwise anti-phishing product was added on. Phorm executives told us these were almost unprecedented levels of support - even higher than that for the BBC iPlayer at its launch.

So finally the British public is going to get the chance to decide whether or not they want the benefits of having their web traffic monitored, and Phorm will be able to show those pesky privacy campaigners that they were wrong. Err, no.

It turns out that not a single UK ISP or website has yet signed up to Webwise Discover - though it is being trialled by a major telecoms firm in South Korea - and Phorm could give no timetable for a UK launch.

When I suggested that after seven years of R&D, a company that was still by its own description in the "pre-revenue" stage had got us all along to launch the equivalent of a concept car, the Phorm executives seemed hurt. Here they were creating a technology company with global reach, entering one of the world's most advanced internet markets - we should all be proud, rather than carp!

BT, potentially Phorm's biggest customer, completed its trial of Webwise last December, and tells me it is still "evaluating" the product. Is it mischievous to ask whether Phorm has got so impatient with the lack of movement from BT - or Virgin Media or TalkTalk - that today's launch was really designed to bounce them into a decision?

Whatever the truth, I left the Covent Garden event - without availing myself of the Buck's Fizz on offer - and wondering how long a company with 150 staff and no revenue can carry on without getting British customers to use what it insists is groundbreaking technology


  • Comment number 1.

    Nice post - I agree completely with you when you hypothesise as to the reasons behind the product launch. I can't help but feel they'd have done better if they launched this part first - it does, at least, offer some kind of value-add proposition to somebody other than ISPs/themselves.

    One (small) point, about that survey that has been quoted. I've tried to get hold of the questions used, but I'm not having much luck so far - it was commissioned by the company themselves, however, which can often introduce questionnaire bias.

    The other thing about that - they're actually quoting that 81% of respondents "who indicated a preference" were in favour. This could give any overall support percentage from 10% to 81%, depending on how many people answered "Don't know" or "Don't care."

  • Comment number 2.

    Normally I don't like seeing any business fail, but in Phorm's case I'm happy to make an exception. And you seriously have to question the survey results; I wonder how they were phrased, probably along the lines of "Would you rather (a) Have the Phorm widget on your PC, or (b) Be fed to lions?" I'd stick to answer b.

    The sooner the EC court case comes down on the UK government and forces Phorm to stop (or at least change the software to an opt-in system), the better. Either that or every major website will block Phorm from scanning their site.

  • Comment number 3.

    Did anyone at the launch mention the words Deep Packet Inspection, or Interception of Communications? And did anyone ask how the tracking of browsing - sorry - "discovering your interests" is done? Because that side of the product seems to be identical to the existing Webwise proposals. I saw nothing here which solved the problems that Phorm have been having with regulators here in the EU/UK environment, and nothing that will counter their appalling PR record with UK internet consumers. I've been checking their new website for mention of DPI and tracking and interception - none. And presumably the tracking continues to "scour the internet" making copies of web content licenced only for viewing by the site visitor and not for commercial gain - so the copyright issue remains unresolved. So what incentive is there for anyone to sign up and risk being tarnished with the terrible PR reputation that Phorm have acquired for themselves by the way they have done things so far at the ISP end of their controversial product? I am not at all surprised that they have no customers so far. It does indeed seem to be yet another of Phorm's attempts to manage the news in their favour, because their UK "partners", BT, VirginMedia and TalkTalk are remaining so silent and non-committal. Let's face it - no ISP is going to want to move on this till at least the EU commission have made their decisions about the infraction proceedings against the UK government, for failure to control interception of internet communications. And even then they will be conscious because of copyright issues and the PR backlash they would encounter. Phorm refer again to the vocal minority - is this the vocal minority referred to by Rudolf Strohmeier of Commissioner Reding's Cabinet, in these terms? "Mr Rudolf Strohmeier stated that in all his years working at the Commission there had only been 1 or 2 other issues which had generated such a high volume of written complaints from the public so they were taking the matter very seriously, which is why they initiated infringement action against the UK Government last month."

  • Comment number 4.

    If I was reading a sports article, why would I suddenly want to read about wine?

  • Comment number 5.

    It looks like showing you what you might also want to visit would be optional - but the tracking would not be. This is highly invasive and very disturbing.

    I would personally switch ISP's if I thought his level of monitoring was taking place.

  • Comment number 6.

    Why is this still not an opt in system.
    If phorm want their product sold they should realise that few people want to be spied on without some kind of compensation.

    Better adverts?
    ...I hear phorm tell me but I'm talking more like:
    A cheaper broadband package when phorm is included or perhaps a monthly compensation payment.
    THEN I'll think about it.

    According to the "Who's Watching You" series, personal information powers the internet. I disagree. I'm still fairly discreet and I hope my ISP understands that I want to stay that way.

  • Comment number 7.

    Not much difference between tailored content and tailored ads is there? Your tailored content would be links to 'selected' (i.e. paid for) sites.

    Same old stuff. Same old con. Spyware trying to go 'mainstream'. It does say a lot about this country that they even think they can get away with it.

    With regards to survey results; you could prove Stalin was a lovable old rogue by asking the right questions.

  • Comment number 8.

    The problem with Phorm's technology is that it has to perform the deep packet inspection to find out that you've opted out, so they've done the illicit stuff before they can decide to ignore your data.

    The other contradiction in the Webwise Discover product is that they would need to hold more data on your browsing history for it to be useful, and that's exactly what they say they don't do!

    It would seem that the only way Phorm can make Webwise palatable is through misrepresentation. The level of deceit to which this company subscribes leads me to believe that many of the assurances they have given are truly worthless.

  • Comment number 9.

    no mention of the intercept by the ISP (using phorm supplied and programmed kit)
    no mention of the requirement to get permission of the websites visited for use of content for commercial gain
    no real mention the user has to agree to the webwise advertising system or how the monitoring works, so much for informed consent
    as to the survey, 81% of people who showed a preference, so how many people showed a preference? if only 10% showed a preference that then changes to only 8.1% of the total number of people, without the full data quoting percentages is meaningless


  • Comment number 10.

    Can people confirm that Phorm works as so:
    1) User browses web - request sent to website
    2) Phorm sees that you have requested somesite.tld
    3) Phorm checks the keywords/content of this site (from an index it has built up by spidering the web)
    4) Repeating this process builds up a profile on you as same keywords will appear more.
    5) Phorm's adverts will then show on sites that are signed up.

    If it is, a couple questions:
    a) Surely it can only identify a user by IP address. So potentially it is the usage of many people that could contribute to adverts, making them irrelevant
    b) Dynamic IPs cause an issue?

  • Comment number 11.

    Well you got the tone right Rory. It's phlatter than a phlat very phlat thing. One has to consider if the timing of this launch has more to do with the financial year or the actual delivery of a product/service which is ready for consumer and ISP use...

    The widget changes little really tho doesn't it. It still comes from the same group of people who created a new company website only a few weeks ago which claims to tell the truth about their project, yet they have had to remove accusations against individuals and take content off the site where they referenced the BBC, individuals, the Downing Street Website Managers etc. I would not trust this company, they can keep their widget and I will stay with an ISP who is not going to do business with them!

  • Comment number 12.

    I notice that in other interviews, Phorm claim that they will shortly be meeting with the BBC to show how wonderful it will be for the BBC to host this widget. Only someone who has never visited the BBC site would say any such thing. I find the BBC site most useful for finding related content from any page plus every page offers a search box which I can use to find anything else I am interested in.

    I do not need a widget to remind me what I was interested in reading over the last few days (I have already read that).

    And, as a licence fee payer I will be most upset to see the BBC hosting a widget that is designed to fund a 3rd party ad network and ISPs through the profile data collected by the widget.

    The BBC already collects sufficient data from its visitors including persistent cookies that would make it very simple for the BBC to develop its own 'widget' to provide this data without needing to pass any of the BBC's valuable market data to 3rd parties nor infringe the privacy of visitors to the BBC sites.

  • Comment number 13.

    First, lets clear something up: previous posters are quoting the questionnaire stats as being percentages out of those who expressed an interest, yet the article clearly states "opinion poll showing 71% of those questioned liked Discover, and 81% liked it when the Webwise anti-phishing product was added on". This is clearly saying that however many people actually answered the questions, 71% liked Discover (e.g. if 1000 people answered, 710 liked it). There is no mention of whether or not respondents expressed preferences etc.

    However, the real figure we should be concentrating on is the 29% who didn't. That is over a quarter of people questioned about the product did not like it. Maybe it's just me, but if you scale this up to a percentage of the UK population (estimated around 61,000,000), that's an estimated 17,690,000 who are anti the system. A rather large number of people in anyone's opinion.

  • Comment number 14.

    BT conducted a secret trial & lied to its customers. If the product really was that good, they would not have to conduct under hand secret trials, this alone points a finger of suspicion.

    The very manner the way the system operates is totally unacceptable. I would complain bitterly if Royal Mail opened my post, then tipped junk mail through my letterbox based on what theyve read. The very fact a Russian, employing a pack of ex Soviet spies does it with internet traffic just beggars belief.

    I really do hope the recession bankrupts Phorm & all those associated with it.

  • Comment number 15.

    In the perfect world, no website would have adverts at all. Wikipedia achieve this via donations while the BBC achieve this at the expense of the UK taxpayer - but these are both relatively rare business models. With non-retail sites such as Facebook, MySpace (and increasingly Twitter) spending millions on infrastructure, at the risk of patronising all of the readers here, we have to accept that these companies need to break-even on those costs at the very least in order to keep providing the same level of service.

    Phorm have gone about this the wrong way. But the underlying concept is in everyone's best interest. Using Facebook as an example... their advertising real-estate is finite. If they are currently making x million through brute-force, blanket advertising, then surely a more subtle, targetted form of advertising will increase that number considerably. Facebook's revenue increases therefore ensuring Quality of Service, and the user experience increases because the adverts will be tailored, rather than the garish dating ads they currently seem to favour.

    Phorm is perhaps now irreversibly tainted. But a company that can balance privacy concerns with targetted advertising technology will have effectively built their own money-printing machine. And we, as consumers, should be encouraging this and asking for it. It's the price we pay for a high quality, high-speed, and more importantly FREE web. Not every website has the luxury to bill their costs to the UK taxpayer.

  • Comment number 16.

    #13 risksarchitect

    Here's why I question the survey results:

    I was quoting from the official statistic reported on the Phorm website itself. It comes up in a big blue box on their site, and says:

    "81% of broadband users who expressed a preference liked Webwise with Anti-Phishing and Discover"

    So - 1) They're quoting it as "expressed a preference" - I actually work in market research, and this wouldn't be included if it wasn't needed to make the number so high.

    2) "Anti-Phishing" is a very good word to include in a poll question, if you want good results. Without knowing the wording of the question, the result are fairly meaningless. For example, these are both potential questions (and, they're badly written ones deliberately), which would give different answers:

    "Would you be in favour of a service that filtered out uninteresting material from the internet, and protected you from phishing attacks?"
    "Would you be in favour of a service that monitors your browsing habits to target you with specific advertisments?"

  • Comment number 17.

    Lets hope Phorms "webspies" product and it s derivitives never see the light of day in this country...If it were not for the fact that the employees would lose their jobs, I would like the company to disapear as well but hopefully they wil get the message and diversify into areas that does not involve spying on joe public.

  • Comment number 18.

    @ digital_elysium

    The underlying concept behind Phorm's technology is not in anyone's interests except their own. It uses a system called Deep Packet Inspection (DPI), this is a very intrusive system that looks at every packet of data that arrives and leaves your PC. Even the Police need legal agreement to use this but it seems that Phorm can use this against anyone who doesn't opt out. Imagine someone used a wire tap on your phone or mobile just so they can send you a better advert, would you be happy about that?

    Time and time again experts (Richard Clayton and Tim Berners-Lee to name just two), the Government's own Information Commissoner's Office and the European Commisson have questioned the legality of Phorm.

    If anyone thinks this is just a storm in a teacup, then they don't understand the issues behind it.

  • Comment number 19.

    I ignore all advertising on web pages, targeted or otherwise. If I want something then I prefer to search for it, compare features & prices and arrive at my own purchasing decision. I can't be alone in this.

  • Comment number 20.

    @ #10 (pigeonfriend)

    Not quite correct i'm afraid.

    Phorm works by taking a copy of everything that comes down to you through your ISP and reading it. They are in cahoots with the ISP. Once people understand this, it is easy to also understand the massive level of protest against the model.

    The analogy of the post office opening your mail to find out what you are interested in is spot on.

    It then uses your interests to send you the ads it thinks you might click on. Most people do not have an issue with the advertising part of this, it's how they profile you in the first place that must be stopped.

    This 'new' product merely substitutes suggested links for the ads, the profiling (called deep packet inspection) remains the same. It is likely that this 'webwise discover' is really aimed at encouraging ISP's to join up.

    You can find out more here :-

  • Comment number 21.

    I don't think thatdynamic IP addresses would cause too much of a problem if the cookie diagram on wikipedia is correct since I believe a user will 'effectivly' be assigned a userid which will be saved on a cookie on the users machine. Thus more of a problem would be the user who accesses the internet by various machines, however I guess as people access online services for which they need to be logged on, there would be nothing to stop a phorm type service cross relating these id's to a phorm UID and tracking them way.

    I am very opposed to the use of such technology and like others would swap ISP's to avoid it, however I can't help wondering why the government has not come down in opposition of such intrusion, unless they wish to use the technology in some way?

  • Comment number 22.

    #18 @nenslo

    I did say in my post that I thought Phorm had gone about this the wrong way, and I was making reference to DPI.

    My point was that there are those who are complaining, not so much about DPI, as about targetted advertising in general. My point is that I believe, from a user perspective, it is certainly not the worst way of monetising the web. And for the website owner a targetted ad is more likely to yield a result than a blanket one - even if most users adopt the approach of @jayfurneaux in post #19.

  • Comment number 23.

    I sincerely hope they fail for 2 connected reasons:

    1) Obvious problem is privacy, who really wants there ISP using Phorm and analysing every single packet of data they send/receive?

    2) What is the actual point of it? Yes focused advertising is a huge area and will only grow as data communication develops further. Surely they would have realised though that no one wants to be watched/monitored (See Google Maps Streetview for some of the more extreme views) without there permission or awareness. Thus, no one would want to use it or stay with an ISP that was using it. Anyone who is aware that a significant number of the most popular sites on the web are porn would realise that Phorm would be an instant turn off ;)

  • Comment number 24.

    @21 -
    I think the reason the government is watching so intently but doing nothing is to judge the public reaction. They would love to track everyones usage on the internet under the guise of anti-terrorism. Its astonishing that something as important as the Internet to most peoples lives gets so little press when something as potentially intrusive as Phorm was being tested, why didn't the BBC et al make a bigger fuss, if peoples phone calls were being recorded then they would go nuts!

  • Comment number 25.

    Spot on. It occured to me that using such deep packet inspection/modification technology for advertising is almost (and I say it with irony), an acceptable usage. In a world in which terrorist justified surveillance by interested parties is increasingly being deemed acceptable, such technology could become a very powerful weapon in the arsenal of security forces who could mould internet information to their own agenda.

    What I fear is that while Phorm may justifyably fail, in their implementation, the genie is out of the bottle and someone else somewhat smarter and more canny than Phorm will pick it up, run with it and succeed.

  • Comment number 26.

    @ digital_elysium (post 22) who says: "My point was that there are those who are complaining, not so much about DPI, as about targetted advertising in general."

    Just to make it clear, that although some individuals may be complaining about targeted advertising, the basic campaign about Phorm is not, and never has been, a campaign against advertising or even targeted advertising or e-commerce. It is against the use of Deep Packet Inspection within ISP networks as a means of DEILIVERING behaviourally targeted advertising, and the way in which that both interferes with consent, and also intercepts communications traffic. The new product that Phorm are talking about, "Webwise Discover", really does not alter the various legal arguments, and it does not substitute for, but merely acts as an addition to, the background problematic controversial Webwise product, and its use of DPI for interception, and also for the exploitation of copyrighted web content for commercial gain, without benefit of a copyright licence granted by the owner of intellectual property being exploited (such as licence funded BBC content for example). It also presents a number of security issues, which are currently the subject of investigation.

  • Comment number 27.

    Excellent article. Phorm deserver rightly to fall phlat on their faces.

    Without going conspiracy barmy it doesn't take too much effort to imagine how much support Phorm would have had from the government and intelligence services. I'm far from being a legal eagle but where does the Phorm work end and the RIP Act begin.

    The government are yet again trying to increase the monitoring of internet traffic ( in the name of increased security. All without very clear justification.

    If I want my internet usage monitored I'll do it using Google or some other means. I can add toolbars and all sorts of widgets if needed, Phorm is completely irrelevant to what I want from the net. I'm glad the ISPs are sensibly staying out of this.

  • Comment number 28.

    This would be like a satellite TV company monitoring what programs you watch, and then showing custom adverts in between the programs. Watch a lot of top gear, football and car-chase programmes? Then you're probably in your 20 - 30s, so they'd show those type of adverts.
    The big difference obviously is we use the Internet to have private conversations and do business. Maybe a better analogy would be the postman looking at your parcels to see what you've ordered, and then making recommendations as to what else you might like, but without giving you a choice first.
    If my ISP ever rolled out this eavesdropping service, I would switch. I'd rather have dial-up than be spied on.

  • Comment number 29.

    @ digital_elysium in post 22 ("there are those who are complaining, not so much about DPI, as about targetted advertising in general.")

    Like BTCustomer above, I'm not complaining about adverts in general, not even adverts that attempt to target me based on my internet usage.

    No. My problem with Phorm is the Deep Packet Inspection. I dislike the fact that they tested it on customers without asking (2006 & 2007) and even when they did ask, they designed and worded the consent page in such a way as to try and get people to opt-in by not fully informing people (they were told later by regulators that they will not be allowed to re-use that layout and wording for any true live product)

    I also have a problem with BT for that matter because they are inextricably linked in this so called "Value Adding" product/service called "Webwise" (aka "SmartWeb" and "QookSmartWeb" in the trial Phorm claims is running in Korea)

    And the reason Phorm deserve to "fall phlat on their face" as ElectricOwl says, is because they have not learned a thing.

    Unfortunately, to use BarryLowry's words above, I do not think we will see Phorm "diversify into areas that does not involve spying on joe public" because Phorm is the name for a company that was called "121Media" and anyone can look that up on the net... Indeed, you will find interesting references to the company on the Symantec and F-Secure websites.

    Phorm has absolutely made some huge errors in public relations, their agents changing the Wikipedia content about their company and being caught out doing it... untruths on their new website which was supposedly "set out the true story, so that you can judge the facts for yourself." (See Darren Waters piece

    So... judge the facts for yourself. The European Union is something I've never been a great fan of in the past but I do hope they come to our rescue and tell our government and regulators what is not acceptable, because without action from the EU we might as well open up any communication to interception and examination for someone to make money out of it. What's happened between BT and Phorm in these last few years is crazy, you really couldn't make it up - nobody held to account for it! Phorm continues to work on it, expanding it, because they still hope and believe they will be allowed to implement it. And nobody (not just Phorm, BT, Virgin or TalkTalk) should be given a green light to do this.

  • Comment number 30.

    I think it is safe to say that Phorm is dead in the water because of the forthcoming EU prosecution. Phorm is a small start-up (with none of the charm of Google) that can just switch of the light and leave the building. BT is a massive public company with a massive turnover. They have seen the EU bite and bite hard (Intel and Microsoft) so they will want to assess the risk to themselves prior to going live with the service. Similarly all the other ISP's will want to see what happens to BT. Now the one thing about Europe is that it moves quite slowly so there will be a long period before anyone can assess anything. Far longer than Phorm can hold out.

    One a parallel note I have moved into consulting now and have only 100 or so websites on our servers left now. But if Phorm scanned my sites and suggested other sites that the customer might like to visit I would sue Phorm for scanning my copyright. I don't know if any of you remember the Internet Explorer 6 arguments about smart links. This isn't exactly the same but not far off. Website owners and SEO (Search Engine Optimisation) companies have enough trouble getting customers to their sites and I think they would really bite back at a company that potentially lures these customers away.

    Phorm was a nasty idea that will come to a nasty end.

  • Comment number 31.

    So they ran a survey?

    I think a reminder of how surveys can be manipulated courtesy of Yes Minister is required:

  • Comment number 32.

    In the United States, there are trial programs by the Dept Homeland Security to voice match conversations (not the content but the sound signature) with suspected terrorist voice signatures. These trials are underway with at least one cell carrier. Under court rules, DHS can examine the from/to cell addresses plus with real time calls, the cell tower addresses. Now they can look for matches on voices against a database. All without you knowing that this is happening. In much earlier times with party lines, people could listen on other conversations.

    Phorm is just a 21st century version of the same approach except it keeps "history" of your "conversations". This is the cardinal issue and that is why it requires a pre-disclosed opt-in at the ISP level.

    Abuse will not come from marketeers or web services; it will come from govt intrusion under any and all sorts of premises. And remember, systems like Phorm are useless unless people manage them. There's the rub and the potential for abuse.

  • Comment number 33.

    I moved ISPs recently because I had concerns about bandwidth throttling issues at busy times. I would have moved to BT, but instead went with an alternative (and more expensive) provider who was prepared to give me the assurance that they would have nothing to do with Phorm or similar technologies.

    I suspect that I am just one of thousands of customers that BT have lost over their support of Phorm, and I hope that BT will realise the impact that Phorm is having on their customer base and decide not to deploy it after all.

    Being able to opt out of the targeted adverts is not good enough: until Phorm makes the deep-packet inspection of traffic an opt-in process (as against not even offering the possibility of opting out of it) I will have nothing to do with any ISP that considers deploying this technology.

  • Comment number 34.

    The whole concept of DPI AND targeted ads is abhorretnt.

    Besides, if I search for something I'm interested in purchasing I'll already have an idea of which sites I want to visit. The only ads that interest me are ads for things I've never thought of looking for/purchasing. Have Phorm written an algorithm for surprise? If not they can get lost, if they have they've collected too much data from myself to work out what will surprise me.

  • Comment number 35.

    When i first heard about Phorm via a monthly magazine i was and still am dead against it - so much so that i was prepared to cancel my internet connection with my isp because they had been mentioned as a possible candidate for using it, only after reassurances that i would be fully notifies of any change did i continue to use the connection.
    I may have got the wrong end of the stick from the article but what does seem like a good idea to me is a widget / browser add on that a user can install on their machine and when browsing a website click a button to open a new window with related pages / advetising relating to what they are looking at - i would actually be tempted to sometimes use this myself...
    If the software was running from the isp's and not from my local machine there is no way in this world i would continue to use that isp's connection and would disconnect / refuse to continue paying for the connection instantly!!


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