Phorm Still Losing Millions, Raising Millions

Four years after it started, the web’s purported advertising saviour is still losing millions, and still raising new financing.

Phorm, which has now moved down to South America after failing to curry favour in Europe, lost $27.9 million in 2010.

But last year it raised £6 million in new funds through a loan, has already taken another £10 million this year, and is also in “active exploration of further funding to meet near term working capital requirements”.

How Phorm can keep on raising funds to support business development whilst not making any money is an impressive kind of alchemy. Between 2005 and 2010, it had raised £53 million.

But Phorm, in its 2010 earnings disclosure, notes the “start of revenue generation in Brazil“, saying that country’s Oi ISP now plans a nationwide Phorm roll-out following its earlier trial, in which it served seven million ads through Phorm. “We expect Brazil alone to make the group substantially profitable in due course,” CEO Kent Ertugrul writes. Phorm clocked zero 2010 revenue.

Phorm claims “strong interest” in Asia and South America, “excellent progress in China, (where it is) currently negotiating contracts with a number of ISPs” and the “launch of service with a European ISP anticipated before the end of the year“.

Phorm’s technology promises better advertising targeting by taking anonymised data on ISP customers’ entire browsing activities, rather than just the activity that occurs on ad network member sites – the idea being, publishers could charge more for these more specific ads. It announced three trials with domestic UK ISPs but was drowned out in a privacy storm.

Annual report.