Earnings: Phorm Needs Quick Custom To Offset Delays And Costs

That trial couldn’t come quick enough. Controversial behavioural ad targeter Phorm’s half-year losses grew from $16.3 million (£9.04 million) to $24.7 million (£13.7 million) in the first half of this year.

BT’s trial of the service starts today after a delay of several months, with TalkTalk and Virgin Media (NSDQ: VMED) waiting in the wings for same – but trials are only trials, Phorm is still saying only that it “anticipates” the other two to come on board in due course and it’s still not naming names for other ISPs around the world it says are interested. It would wish to be closer to getting some actual custom at this point.

Despite raising £32 million through a new equity issue in March, Phorm still only has £24.9 million in the bank. Where’s the money gone? In to technology infrastructure and engineers, who have been hired to accelerate the slow integration process with ISP networks. There seem to be several technical problems, though Phorm said the TalkTalk and Virgin trials are being held up by preparations at the ISP end.

CEO Kent Ertugrul acknowledged Phorm has “significant challenges” and said the next phase must involve “prudent budgeting and allocation of capital and manpower”. He admitted: “Although considerable time has passed between the announcement of the launch of Webwise/OIX in February and the commencement of the BT (NYSE: BT) consumer trial, we have been working hard to create the right conditions for a successful trial. The OIX is not a small project. Indeed, we believe that it has the potential to create a new model by correcting a number of structural inefficiencies that lie at the heart of online advertising.”

Already, the company is looking at applying the Phorm technology to “applications beyond advertising”. Perhaps it should walk before it runs.