Phorm, advertising, marketingWhat a difference a year can make. This time last year, several major British Internet service providers (ISPs) were abuzz with plans to use special advertising software from New York City-based Phorm, Inc., to deliver targeted ads to customers based on their Web browsing habits. Earlier this week, BT Group announced it was putting its plans for using Phorm's Webwise software on hold indefinitely, while Virgin Media and Carphone Warehouse Group have likewise distanced themselves from Phorm, the U.K.'s Times Online reports.

Despite BT's claims that "interest based advertising" could offer "major benefits" and the company's controversial trials of Webwise on its 36,000 broadband customers without their knowledge, BT said in a statement Monday that it had "no immediate plans to deploy Webwise." Rather than citing the questionable legality of its Webwise trials, BT said it was a question of resources. (They'd rather focus on developing next-generation broadband and television services in the U.K.)

BT's position prompted Carphone Warehouse to drop its plans as well, with chief executive Charles Dunstone saying in the Times Online, "We were only going to do it if BT did it and if the whole industry was doing it. We were not interested enough to do it on our own."

The allure of being able to gather Web surfers' personal information and use it to sell them things online is likely to keep this issue front of mind, given that tailored ads are much more effective than generic ads and that online advertising is a $20 billion industry, according to the Washington Post.

Phorm says its software installs a cookie in a person's Web browser that assigns a unique, randomly generated number to that customer in order to preserve anonymity.

Still, even Web inventor Tim Berners-Lee has spoken out against Phorm, posting a statement to the World Wide Web Consortium site in March indicating that the power of the information browsed on the Web is so great that "the commercial incentive for companies or individuals misuse it will be huge, so it is essential to have absolute clarity that it is illegal."

For more comprehensive coverage of tech-related privacy issues, see Scientific American's in-depth report, "Technology's Toll On Privacy And Security."

Image © james steidl