Set forth below is a complete copy of the webchat that aired on Webwise.com at 8:30pm GMT on March 6, 2008.

"KentErtugrul" is Phorm CEO Kent Ertugrul; "MBurgess" is Phorm SVP of Technology Marc Burgess. Phorm is the company that provides the technology that underpins the Webwise feature.

This transcript is for informational purposes only and Phorm is not responsible to update or keep its information current.

Transcipt text

KentErtugrul
Hello thank you all for coming..

MBurgess
Kent is just getting into the swing - he's answering a question from M4rk ...

m4rk
Hi Kent, how do I stop my browsing habits from being sent to Phorm's servers by my ISP?

KentErtugrul
Webwise is explicitly desined to make it posible for anybody to easily opt out. Not only will the first thing you see be a window offering you a choice as to whether or not to participate, you will be reminded periodically as you browse through the ad slots inside the websites that you browse, that Webwise is on / off. You will then be able, simply by clicking on any of the ads, to opt in or out. Once launched, Webwise will offer users an unprecedented level of transparency in freely chosing at any time whether or not to participate

KentErtugrul
Apologies for my poor typing at speed by the way

wg
My Question:- why is the IT community up in arms over Phorm, when they seem quite happy to use Google, knowing full well that Google uses the searchs to delivery contextual adds, AND have Google store the data for a year.

KentErtugrul
Good question - I firmly believe tht if people undersood better what we are doing, they would welcome what we are doing as a giant step forward in data storage, privacy and transparency

guest
Are we opting out of the ad system of of the actual IP packets from touching 3party systems (ie yours) within the ISP domain?

MBurgess
Both. When you opt out, your browsing information is not passed to Phorm, and as a result, you won't see any targeted ads. However, the websites you view won't stop showing you ads - they will just be untargeted.

Dephormation.org.uk
Will details of my HTTP activity be sent to Phorm, even if I opt out? A cookie is merely a request for your co-operation, not an opt out mechanism.

MBurgess
No, your browsing behaviour will not be sent to Phorm if you opt out. If you are looking for an opt-out mechanism that doesn't rely on the presence of a cookie, you can set your browser (Firefox, IE and Opera) to block cookies from our ad-serving domain, webwise.net.

Jim_Murray
What is Phorm's response to the opinion of Professor Sommer (LSE) that the implementation of this technology as proposed by some ISP's may breach RIPA legisaltion?

KentErtugrul
Firstly, we do not believe that Professor Summer has a full understanding of how our system works. We have offered to walk him through it and would welcome the opportunity to do so, just as we have any number of reglatory authorities, including the Home Office which is responsible for the appllication of RIPA. Secondly, you should be aware that we have spent an enormous amount of time, as have our ISP partners, verifying that all of our activities are fully compliant with all regulation. I believe that it is reasonable to suggest that if BT, Virgin and Carphone Warehouse are all participating, it is because they have fully satisfied themselves of the legality of their decision.

Dephormation.org.uk
Will Phorm be able to profile the http requests used by web services/SOAP commonly used by applications like iTunes, Windows Media Player, Google Earth, remote desktop, and instant messaging clients?

MBurgess
No, prior to the Phorm analysis, the system checks the HTTP user-agent header and ignores any requests that are not from a whitelist of supported browser types (Firefox, Opera, IE).

TheObserver
So if you opt out your data never touches a Phorm server? This is at odds with much coverage, which suggests the data still goes to your server but you discard it if the opt-out cookie is present.

MBurgess
Yes. There is widespread misunderstanding of how the system works, which is why we are keen to set the record straight...

Jim_Murray
Further, how do you respond to the statement by Professor Anderson (Cambridge University) in a This is Money article that 'if you care about your privacy, do not use BT, Virgin or Talk Talk'?

KentErtugrul
I believe that given the chance to fully understand our technology, Professor Anderson will reach the same conclusion as Privacy International*, Ernst and Young and any number of key privacy stakeholders, that Phorm represents a major breakthrough in online privacy. There is no online participant today which manages to generate such a level of relevance in advertising while simultaneously maintaining complete anonymity, no storage whatsoever of browsing history and such a transaprency as to choice of participation. If you look at your browser right now, you will see that perhaps hundreds of cookies have traked your activity online. You never gave permission for any of that, they all store where you have been and shutting off cookies makes the internet basically unusable. Wold it not be better to have something far more useful from an advertiser's perspective, which stores no data at all as to browsing history and for the first time gives users a clear and readily accessible on / off switch?
*[Note: Simon Davies, MD of 80/20 Thinking, conducted a Privacy Impact Assessment. Simon is also Director of Privacy International.]

Dephormation.org.uk
Will the 'opt out' cookie expire? Why? After what time period? If I flush my cookies, will I need to 'opt-out' again?

MBurgess
The opt-out cookie expires after two years. Why? Two years is a LONG TIME on the Internet! Seriously though, we would consider extending the lifetime if you think it's a big issue ... Yes, if you delete your cookies, you would need to opt out again, unless you block cookies from webwise.net, in which case you will be opted out permanently.

Dephormation.org.uk
If I use a web mail or forum application, like HotMail, Slashdot, Yahoo Groups, or Virgin Webmail, will Phorm be able to see/use the contents of the emails/messages I read?

MBurgess
No, we don't analyse the content of webmail sites.

Jim_Murray
Mr Burgess stated that 'if you opt out, your browsing information is not passed to Phorm'. Does this mean that should a user opt out of the Phorm system no equipment belonging to Phorm will ever see any data? If so, how is the decision made as, being cookie bases, some interception must occur in order to make that decision.

MBurgess
The ISP controls whether the browsing data is passed to Phorm. Its systems check for the presence of the cookie.

fieldmouse
I don't want to be bombarded with more advertising

KentErtugrul
Nobody wants to be bombarded with ads. In fact if you want to reduce the amount of advertising you see,Webwise is probably the best thing to come along. The reason is simple: you get bombarded with ads because advertisers today have no idea of the interests of the people to whom they are advertising. So the only way they can get any cmpaign to work is to throw hundreds of ads at you to see what sticks. It is a terrible system. It wastes your time and attention and wastes their money, whilst generating minimal revenue for only a few websites. If advertisers were aware of the product categories which interested veiwerss, the net result wold be far less advertising.

m4rk
If you are so open about how your system works, why don't you simply publish the information on your website so that your detractors can inspect it?

MBurgess
We are going to update the website with more detailed information about how the system works for precisely that reason. Watch this space ...

guest
btw you are answering without too much marketing speak, which should be commended

KentErtugrul
Thank you. Nice comments welcomed :-)

Dephormation.org.uk
Will any data gathered be sent to China or the USA? Why isn't it processed in the UK?

MBurgess
Browsing data is ONLY processed within the UK ISP's network. It is not sent to China or anywhere else.

Dephormation.org.uk
Will the Virgin Phorm UID also cookie be encrypted? (the BT Phorm UID is). If Phorm were as open and transparent as you claim, this UID should not need to be encrypted.

MBurgess
The UID is not encrypted: it is a randomly generated binary string that contains no information, but is just used to guarantee uniqueness. You're unique!

AnthonyL
who are the advertisers that work with Phorm?

KentErtugrul
Advertisers generally have applauded the introduction of Phorm, which transforms their ability to only show ads to people who are interested in their products, thereby making their marketing budgets much more effective

Jim_Murray
Could Mr Burgess clarify exactly what he is considering to be a Phorm server? At present there does not seem to be a clear understanding of where, exactly the decision to process or not to porcess information is made and what information from the page is available at that point>

MBurgess
We're going to show the demarcation in the new detailed description on the website so that you can see what we mean. Sorry you've had to wait for this.

m4rk
Is it true that phorm intercepts and modifies the response to every single web page I view?

MBurgess
No, we do not modify pages at all.

Chroma
How vulnerable is the system to external parties? by that i mean, how concievable is it for a criminal organisation to effectively hijack the hardware and modify the code to gain details on peoples information?

MBurgess
Obviously we are very concerned about security, and we have precautions against compromise occurring, and monitoring to detect attempts. It's worth remembering though, that we don't have personal data or clickstream history stored in the same way as Google or AOL, so accidental or malicious disclosure is impossible.

phkphorm
MBurgess - why do we need to be "unique" if Phorm have no interest in tracking who we are?

MBurgess
We do not know and cannot know who you are. But to deliver relevant material to you, we need to distinguish your browser from the millions of others on the net.

Ksg
How does Phorm advantage us as a user?

KentErtugrul
Good question with several answers. Webwise brings the following benefits to users: 1) Reduces the amount of irrelevant advertising which you see as you browse 2) Long term, reduces the amount of advertising which you see altogether 3) Dramatically enhances the landscape of online privacy by introduding, for the first time, a system which is completely anonymous, keeps no record of where you ahev been or what you have searched for and gives you a clear and transparent on/ off switch 4) Makes many more of the websites which you visit much more profitable, making the internet a more vibrant, interesting and relevant place to be 5) Protects you from online fraud without having to download software, switch it on or update it. Remember that the most likely victims of phishing attacks are the least likely to to have taken the necessary steps to protect themselves 6) Allows ISPs to give you a better quality internet 7) Creates a "Google while browsing" web experience 8) Creates many other additional opportunities which we will be presenting in the future, each of which is very beneficial and each of which, like webwise, will always be an open choice on the part of users as to whether or not to embrace

narcosis
What sort of impact will the scanning & tagging of http traffic have on response times during peak surfing times ?

MBurgess
Pages are not tagged (or modified), and the keyword analysis process is offline so it can't affect response times. The ISPs are very concerned not to interfere with users' browsing experience.

Huw_Jerse
Isn't the truth of the opt-out versus opt-in not that no-one would opt in if allowed an informed free choice?

KentErtugrul
The reality is that extensive market research was conducted by the ISPs prior to launching webwise. Although many of the commentators in this forum represent a somwhat self-selected group of people whose reaction is negative, the overwhelming majority of people responded extremely positively to a safer, more relevant internet free of charge. Why not give it to them? Similarly, how would you explain to the victim of a phishing attack that you could have protected them automatically but did not?

fred_Blogs
Whist Phorm's own system is detached from the ISP traffic surely the insertion of additional data (adverts) into a traffic stream is a prima face case of a breach of RIPA by the ISP involved?

KentErtugrul
Just to clarify: we do not serve adverts into the traffic stream. The websites within which the ads appear are in fact our partners. They choose to partner with us to bring you more helpful, relevant and yes, more valuable advertising

guest
Having a system that provides a form of customised marketing is one thing. But do you understand the real concern shown here and on other sites for what browsing information (or interet connection info, MAC address, IP address, ISP account info) is used or stored in order to provide this service?

MBurgess
Yes, we do understand people's privacy concerns. That's why do NOT tie into the ISP authentication systems, don't use MAC addresses and don't store IP addresses. It's important to understand that our system uses page information to make a real-time match against advertiser categories (e.g. sport). We only store the category, not the browsing information, so we can't tell where you've been on the internet, or what the page contained.

r2d2d3d4d5
is any data sent abroad. for example the analysis of the anonymized users behaviour.

MBurgess
No, browsing data is only processed within the UK ISP network.

bob
Will this still work if I already block all adverts by default?

MBurgess
If you block all ads, then you'll block ours too!

Annon101
Will the duplication of pages to the Phorm server count towards any Traffic Management cap the ISP may have?

MBurgess
No, this is internal to the ISP infrastructure and won't affect your account.

narcosis
It would seem that the biggest issue so far is with the opt out feature. Can you please tell us, if opted out, will ANY data pass through ANY server owned by Phorm either within the ISP network or not ? If it does then why if we have opted out ?

MBurgess
No, if you opt out, none of your data will pass through a Phorm-owned server.

Dephormation.org.uk
Will Phorm be able to profile HTTP requests for content such as external images embedded in HTML email I view in an email client such as Outlook?

MBurgess
No, non-html content cannot be parsed.

Dephormation.org.uk
Please explain more about Kents links with Context Plus, Apropos, and PeopleOnPage. Why have these 'services' ceased?

KentErtugrul
We have never denied that we were in the adware business. Such a business is involved in the legitmate bundling of adserving technology with free sowftare applications willingly and knowingly downloaded by users. It is the very fact that people were always unable to distinguish between legitimate adware and illegitimate spyware that caused us to do something unprecedented: As the only publicly traded adware company, listed on the London Stock Exchange with Fidelity and a series of other blue chip shareholders and the former chairman of Microsoft UK as our Chairman, we unilaterally discontinued our entire revenue stream, concluding that the spyware association was inconsistent with our long term goals. This history is entirely a matter of public record which can be found on the london stock exchange's website

Jim_Murray
On a similar note I would also like to thank both Mr Ertugrul and Mr Burgess for answering questions directly and without attempting to 'spin' the answers.

MBurgess
Thanks for giving us a chance to explain to you directly, I think it's better than the rumour mill... but I have to admit it's been a typing marathon!

TH
It seems to me that by funnelling all HTTP traffic through phorms servers, you are introducing a massive bottleneck and single point of failure into the system; how confident are you that you your systems won't degrade performance when being used by 1000's of users at the same time?

MBurgess
Our systems are designed to integrate with the ISP networks and work with the existing aggregation points within those networks. They are also designed to be failsafe and specifically not to degrade the user experience even under heavy load. The ISPs are very protective of their networks ...

BogoBunny
How employees does webwise / phorm have and where are they located?

KentErtugrul
This is a matter of public record. We are a listed company with approximately 150 employees, with offices in London and New York. On our board of directors is the former Chairman / CEO of ATT, the current Vice-Chairman of Rothschild bank, the former president of the Coca-Cola company worldwide, the former head of strategy of ATT. Our executive team represents a "who's who" of stars from the internet and media industries: a founding member of Doubleclick, the former Head of technology of Atlas, the former CTO of BT retail, the former head of sales of Expedia, the former head of communications of Yahoo Europe, and so on. We are about as far away from the dark shadowy company portrayed by some of the blogs as it is possible for a company to be

narcosis
If the keyword analysis process is offline then in order to scan for keywords would you not have to have a copy of webpage in order to analyze it offline ?

MBurgess
Yes, a mirrored copy is analyzed.

revchips
how is it envisaged that an opt out will be presented?

KentErtugrul
The first thing which you will see will be a full size page offering you the opprtunity not to participate. You will then be reminded of the ability to switch off at any point inside the ad slots which you see as you browse. It is critical to both ourselves and the ISPs that users ALWAYS be aware of the fact that Webwise is a choice

PaulB
I agree roumour mill is dangerous. I think Phorm need to disclose all network information about how it works etc. Be very transparent. The feeling I get from Kent and MBurgess is that the system is very open, so why not be open with the public about it

MBurgess
Yes, we are going to provide more details about how the system works - and it's been nice to have the opportunity to explain a bit here. I think we'll take all the unanswered questions and put them into a FAQ on the site, so take a look early next week... Goodnight all, sorry if you got missed off this time, but I think we'll do it again soon!

KentErtugrul
Thank you very much for giving us the opportunity to answer at least some of your questions. My fingers are tired and I now have to go to do an interview on Radio 5 Live starting at around 10.30. We have captured all of the questions asked and will do our best to respond on our site. I look forward to doing this again. Good night for now.
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