Phorm the online ad system that claims to generate revenue for providers through better targeting of online adverts is very likely to be feeling the effects of the credit crunch. In the United States NebuAd which was proprosing a similar system has let its PR agency go, and laid off a number of staff. The Register tried to get confirmation of the numbers involved but was unable to.
The UK government has EU commissioner Viviane Reding breathing down its neck, with a deadline of the end of August 2008 to respond to a letter about Phorm from the European Commission. The precise content of the letter is unknown, but it is not unknown for the EU to take a different position to the UK government on issues in this arena and others. It is thought to hinge on whether Phorm breaches European Data Laws.
For Phorm to succeed it has to be able to charge more than normal advertisements, particularly as Phorm, the site the advert is placed on and the broadband provider will all take a cut from the advertising revenue. The ability to target users has already been cut, by the requirement for Phorm to be opt-in, combine this with news of advertising revenues dropping and the chance of Phorm succeeding looks small even without the EU stepping in.