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Software allows ISPs to control Web site ads

Dotcom revenue model shake-up

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Technology which allows ISPs, instead of site owners, to control the adverts which appear on a Web page was released today.

Fotino, which was developed at Brunel University and is being marketed by privately-held company Meltingpoint Technology, promises to stir up legal controversy and put pressure on the advertising model many Web sites rely on for their revenue.

The software allows Internet access providers to overlay advertising banners on any page on the Internet, with adverts sold by and controlled by them instead of the owners of a web page. It can also be used to insert adverts in emails sent via Internet-based accounts.

Julian Graham-Rack, chief executive of Meltingpoint, said the technology would allow the broadcaster of Internet traffic, the ISP, to gain control of advertising instead of the program maker.

He suggested that ISPs have more information about their customers and can therefore target advertising at customers far more accurately, something we can see working for location-specific services but which we doubt works much beyond this. Surely it makes sense to advertise sporting goods on sports sites, for example, rather than persuading people to divulge all their personal interests in the first place.

The idea of Fotino is that users would sign up to the service, providing data that can be used to target adverts, in return for which they would receive some incentive, either reduced fees or improved services. According to Meltingpoint, revenue from targeted adverts would be greater than for those that generally appear on Web pages and it suggests the extra income could make business models like free call charge ISPs more viable.

The software undermines the business model of most Web sites, which are in any case struggling for revenue, and is likely to face legal challenges. Fotino changes the way a page appears on screen, giving ground for possible legal action, however the issue is far from clear cut and Meltingpoint is confident of its legal ground.

Whether the software will shake up the online advertising market depends on its uptake and Meltingpoint said it was discussion with a number of ISPs about licensing its technology. This could be the opening skirmish in a battle of advertising revenues or a storm in a tea cup, but the availability of the technology is the kind of news that could push all-ready struggling dotcoms over the brink. ®

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Fotino demo

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