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Phorm turns up in Brazil

'Is it safe?'

The smart choice: opportunity from uncertainty

After months lost in a jungle of its own creation, Phorm, the much-maligned internet monitoring and profiling outfit, today emerged with new hopes its technology and the tens of millions spent on it might bring some return.

Brazil has long been a destination of choice for those who hit trouble in Britain, and Phorm is no different. Confirming rumours that have been circulating for several months, Phorm said it has signed a deal to profile internet users in the country.

It also announced it has booked £3.7m in targeted advertising, Phorm's first sales revenue since it shut down its previous business - described as spyware by several security firms - in 2006.

It will launch what it described as "the first phase of a country-wide roll-out" with Oi - an ISP - and Estadão, iG, Terra and UOL - portal publishers who will carry targeted ads.

Phorm will also deploy its content targeting system, Webwise Discover, branded as "Navegador".

According to the most recent statistics available from the International Telecommunication Union, there are more than 67 million internet users in Brazil, about 34 per cent of the population.

As was planned in the UK, Phorm will profile internet users' interests by intercepting their traffic and looking for keywords in the web pages they visit. It acts as an exchange, allowing advertisers to target individuals based on what they have recently browsed. The targeted ads will be served up on publisher sites which sign up to the exchange.

Phorm's UK plans hit major problems after The Register revealed it had trialled its technology without the knowledge or consent of tens of thousands of BT customers. Eventually BT, TalkTalk and Virgin Media all pulled out, forcing Phorm to look to overseas markets.

The domestic legal fallout continues, with the European Commission planning legal action against the British government to tighten privacy laws, and the Crown Prosecution Service still considering a potential criminal case.

Chief executive Kent Ertugrul said today: "Our commercial deployment in partnership with many of Brazil's leading internet players reflects the many lessons learnt from experiences in other markets.

"Beyond Brazil, we have successfully completed two trials in Korea, about which we will update the market in due course, and we are now active in almost every other major internet market worldwide."

The Alternative Investment Market, where Phorm is listed, gave today's announcement a positive reception, with shares currently up about eight per cent at £3.75. It seems investors are now more cautious about the firms announcements, however - when its now-defunct British deals were unveiled, Phorm stock rocketed to more than £30. ®

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