It's a fighter

Behavioral ad firm Phorm lost four board members, reportedly because they disagreed with CEO Kent Ertugrul about the company's future. Departees were David Dormon, chairman of Motorola; Virasb Vahidi, former CEO; Christopher Lawrence, Rothschild exec; and Stephen Heyer, ex-Coca-Cola exec.

No specifics were given on their disagreement with Ertugrul. But Phorm was quick to refill empty seats with fresh bodies: Kip Meek, formerly of the UK's Office of Communications; CEO Stefan Allesch-Taylor of Fairfax; investment banker Stephen Partridge-Hicks; and Norman Lamont, ex-Chancellor of the Exchequer during Margaret Thatcher's administration.

All directors will now be based in the UK, as opposed to a handful living in the US — which should enable the company to pursue goals with more efficiency, spokesperson Alex Laity suggested.

"With the board in London, strategic decision-making will be faster," he said, adding that "The United States remains an important market for us."

Phorm partners with internet service providers (ISPs) to serve advertising across participating websites, based on comprehensive web-surfing profiles of ISP clients.

Earlier this year the UK's Foundation for Information Policy Research dubbed Phorm's business model "illegal" under the Regulation of Investigatory Powers Act of 2000. This claim was overturned by the Leading Council and Home Office after Phorm promised to provide opt-out options in banner ads on participating sites.

Stateside, Congress probed the privacy implications of ISP-based ad targeting — which, unlike ordinary ad targeting, can track a user's overall search and site activity.

Rivals, like States-based NebuAd, lost clients as this process wore on. To defend itself on Capitol Hill, Phorm enlisted former Clinton administration deputy chief of staff Steven Ricchetti, who now owns a lobbying firm.

Following the hearings, AT&T, Time Warner and Verizon committed not to work with behavioral targeting firms without first consulting users in advance. NebuAd also lost a pending partnership with Charter Communications, which would have been its biggest client; CenturyTel and Embarq distanced themselves from the firm thereafter.

In September NebuAd lost its CEO and decided to pursue a less controversial ad business model. Comparatively, Phorm has thrived. Though other large European ISPs, such as Orange, publicly decried it, Phorm is currently undergoing a pilot with UK telecom BT Group.

In 2006, BT Group tested Phorm's platform across about 18,000 customers without informing them. The UK's Crown Prosecution Service is still investigating whether that pilot broke any privacy laws.