Setback for Phorm after BT opts out

SHARES in the controversial online behavioural monitoring firm Phorm plummeted 42 per cent to 265p yesterday after BT said it had no immediate plans to roll out the firm&rsquo;s Webwise Discover service.<br /><br />Telecoms giant BT was a major player in the development of the system, which collects information on users&rsquo; online behaviour and targets them with tailored advertising.<br /><br />The service, which was used secretly by BT in 2006, has since been trialled openly, and has been the subject of much criticism by privacy groups.<br /><br />BT said the internet-based advertising category remained of interest, but that it had decided to commit its resources to developing next generation broadband and television services in the UK.<br /><br />&ldquo;However the interest-based advertising market is extremely dynamic and we intend to monitor Phorm&rsquo;s progress with other internet service providers and with Webwise Discover before finalising our plans,&rdquo; BT added.<br /><br />BT's decision not to proceed with rolling out the service to its 4.7m broadband customers will deal a heavy blow to the Aim-listed group. <br /><br />A spokeswoman for Phorm said it continued to work closely with other service providers around the world.