Virgin Media distances itself from Phorm 'adoption' claims

Memorandum of (mis-)understanding?

Virgin Media today sought to publicly clarify its relationship with Phorm, amid concerns that spin from the controversial ISP adware company has worried many of its customers.

Virgin Media has extensively rewritten information on its website about the "Webwise" advertising targeting system to make it clear that it has not agreed to deploy or adopt the system. The newly spelled-out position runs contrary to repeated Phorm press releases and statements made by its executives.

Phorm's share price has been battered by the two-month storm over its history, technology, behaviour and business model.

A Phorm press release, sent to financial news organisations on 14 April reads: "Phorm has already signed agreements to deploy its technology with three major UK ISPs: British Telecom, Talk Talk and Virgin Media."

Not so, says, Virgin Media. Its page about the technology has been updated to say: "Virgin Media has signed a preliminary agreement with Phorm to understand in more detail how this technology works but we have not yet decided if it will be introduced.

A spokesman told The Register: "This information has been clarified to ensure our customers have the full picture."

Virgin Media's Webwise page now states: "Webwise is a technically complex application which could be implemented in a number of different ways and it will be some months before we can confirm if the service will be made available to our customers and if so, how and when it would be deployed."

It's understood that the agreement to look at the adware technology signed by Virgin Media is a memorandum of understanding, a non-binding document.

Phorm CEO Kent Ertugrul appeared to suggest a tighter relationship in the firm's recent preliminary annual report on 10 April:

We announced exclusive agreements with three major UK ISPs – BT, Talk Talk and Virgin Media, which represent nearly 70 per cent of the UK internet market, to adopt our online advertising platform, the Open Internet Exchange (OIX), and a consumer internet feature, Webwise.

Implementation is on track and consumer trials are expected to begin in the near term, followed by roll-out across these networks.

Virgin Media has not and did not agree to adopt Webwise.

Phorm has not returned a call requesting comment.

Phorm's stock price enjoyed a 14 per cent spike in the days following 17 April, when a widely-published AP report reflected Phorm's annual report's take on its relationship with Virgin Media.

AP wrote: "British regulators have reached a similar conclusion [that consent should be opt-in], clearing ISPs with 70 per cent of the country's broadband market - British Telecom, Virgin Media and Carphone Warehouse - to soon deploy Phorm's technology."

You can track the share price rise following the story here at Google Finance.

Virgin Media's new information page says it might want to test Phorm's system with customers at an unspecified time in the future, but that unlike BT in 2006 and 2007 it will ask beforehand. "We'll continue to communicate our intentions openly and transparently," its website assures customers. ®