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Claims that Virgin Media is seeking to dump Phorm in favour of more conventional behavioural targeting firms have been denied by both firms today.

A report in the digital marketing trade magazine New Media Age today suggested Virgin Media was seeking to distance itself from Phorm by working with Audience Science, another behavioural targeting firm.

Without prompting, Phorm issued a firm denial this morning. "There is no substance to today's New Media Age story," it said. "Over the last year there have been continuous attempts to create the illusion that Phorm's ISP partners are parting ways with the company. This is yet another example of such a story, which has no basis in fact."

However, a Virgin Media spokesman said there was some substance to the report. Talks with Audience Science are ongoing, he confirmed, but said the magazine had misread their significance.

Audience Science, like Phorm, is a behavioural targeting company, but the deals it makes with ISPs are for "market intelligence" data to improve its targeting algorithms. It does not seek realtime monitoring and profiling of web use. It raises its own privacy issues by helping websites and advertisers to pool behavioural data and track visitors, but is a very different proposition to ISP-level monitoring.

Indeed, Virgin Media's talks with Audience Science and other targeting companies are being held by its Interactive Digital Sales (IDS) unit, a marketing subsidiary completely separate to the network engineers who would be responsible for any future Phorm implementation. IDS also handles Virgin Media's advertising sales for its TV channels and mobile phone services.

So it would appear that the fact one part of Virgin Media is talking to Audience Science has no bearing on its relationship with Phorm, which it says is unchanged. News the company is in talks with Audience Science, however, potentially explains comments in November from CEO Neil Berkett. When asked about ISP advertising technologies at an investor event in New York, he said: "Our next initiative probably won't be with the Phorms of the world."

Still, despite New Media Age's apparently overblown conclusions, Virgin Media has no schedule for trials of Phorm's technology and it is understood to be a low priority.

Asked for a comment on progress, the ISP offered the same statement on Phorm it has been giving to journalists for months: "The only agreement we have in place is with Phorm. We are investigating the use of Phorm's technology under our existing agreement with the company but, due to the complexities of the proposition, we do not have any timescales on when, or if, we will progress to trial or launch."

If true, the suggestion that Virgin Media was seeking to replace Phorm would have dealt the biggest blow yet to its commercial hopes. Last week its secret trials with BT became the subject of a European Commission legal action against the UK government, while Amazon and Wikipedia - two of the UK's most visited websites - decided to opt their traffic out of interception.

New Media Age's report also said that BT is seeking digital advertising industry views on Phorm's controversial technology, which would seem natural, if somewhat belated. A spokesman for BT said it had no comment to make. ®

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