Updated: Phorm Bags Korea ISP Trial, Carphone Mulls Bid For Tiscali
Update: Phorm’s CEO Kent Ertugrul later told me in an interview that the Korean deal is the result of talks with ISPs “around the world” going back as far as three years and that deals in other countries would be gradually signed as the company grows—he says it might be a while before the next trial announcement in another market, but that doesn’t mean a lot isn’t happening behind the scenes. Ertugrul wouldn’t name a date, but said the Korean trial will start “very soon”.
The controversial and much-discussed behavioural targeting advertiser Phorm has often stated its global ambitions, but so far has produced very little beyond loose agreements with BT (NYSE: BT), Carphone Warehouse and Virgin Media (NSDQ: VMED), and only one live trial. But now Phorm says it’s got a new “market trial” deal with South Korea’s biggest ISP, KT.
—Going live?: It’s grabbed an international trial, but is Phorm any closer to going live with BT here? “Yes, it’s a little bit early yet but as soon as we have an announcement to make we will do,” says Ertugrul and he says the same goes for Virgin Media and Carphone Warehouse, which he expects to go for full deployment at some point. That’s not entirely what VMED CEO Neil Berkett said this month in a BBC interview – he says there are no firm plans for Phorm deployment, though he is watching the progress of BT’s trial and isn’t ruling anything out. More after the jump…
—Global controversy: Phorm hopes to export its patented business model around the world, but not the controversy that currently dogs it in the UK. The focus of scorn from privacy groups and figures such as Tim Berners-Lee, the company is making a concerted effort to take control of its image, and will hold a “town hall” style meeting next month. Ertugrul expects the current debate over behavioural targeting to eventually die down: “I suppose the other countries will have the opportunity more to see the conclusion of this debate rather than go through it themselves.”
—Revenue pressures: Phorm has a model for allowing ISPs and online content creators to make more money, but what about its own shareholders? The company has yet to reap the benefits of its software and still has a large workforce, an expensive London office and now a Korean operation to fund. “There’s no problem getting revenue, this is a significant project and it takes a considerable amount of time…we’re very patient and happy to stand the test of argument.”
Original: If the trial ever leads to any real business for Phorm, it could prove lucrative. Long held to be one of the world’s most advanced broadband markets, according to the OECD Korea has 15 million broadband customers, household penetration of about 90 percent and an ad market worth $1.6 billion (£1.1 billion), according to ZenithOptimedia. Phorm is opening a Seoul office and has appointed Daniel Park, from Korean web business SK Communications, as CEO of its new Phorm Korea division. The company recently made a series of hires aimed at pushing its company’s boundaries worldwide. Phorm shares jumped from £3.60 yesterday to high of £4.90 in early Monday trading.
Back in the UK, one of Phorm’s would-be clients, Carphone Warehouse, may be on the verge of adding 1.7 million broadband customers by taking over Tiscali’s UK ISP business, almost a year after first being linked to a bid. Telegraph.co.uk, without citing any sources, says that Carphone “is considering a last minute bid” to add Tiscali to its own TalkTalk ISP business. Plans for BSkyB (NYSE: BSY) to buy Tiscali UK collapsed earlier this year, apparently over disagreements over pricing. Carphone offered £550 million last May, but that was rejected as too low—yet Tiscali is not in the best of negotiating positions: having offloaded its Italian broadband division to private equity firms for €47 million in February, the company was suspended from the Italian stock exchange this month for failing to meet interest payments on its debt, raising the possibility of administration.
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@psmith
Mar 30, 2009 4:04 AM ET
Posted In: Advertising, Money, M&A & Venture Capital, Mergers & Acquisitions, Companies, Carphone Warehouse, Countries, Asia, Korea, phorm
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