Phorm has created a tool that, if allowed to operate, will produce the most comprehensive data mining of Internet user actions that has been encountered.

The tool they’ve created can track every online action a user takes. They do this through data collected by ISPs. So, in order to make it happen, they need permission from the ISPs to run their tool. This partnership, along with that of advertisers, serves up ultra-targeted ads to users whose data is mined.

“As you browse, we’re able to categorize all of your Internet actions,” said Virasb Vahidi, the COO of Phorm. “We actually can see the entire Internet.”

Phorm is not particularly unique. Other companies have come out with similar such software, but none has actually had the success that Phorm has had. In the UK, Phorm has access to about 70% of the country’s Internet users and operates as a opt-out program with differing degrees of notification.

Not surprisingly, controversy has followed. Phorm has responded that they use a random number in place of a user’s name, and won’t mine any information about a user’s name or, for example, their health.

It will be interesting to see where this goes. As the Beacon situation has taught us, any sort of program that raises privacy concerns must be handled with the greatest of care. Transparency–or at least the illusion of it–is essential to any operation that collects or distributes personal data.

Vahidi is defiant. “Anyone who wants to look at it is more than welcome to come,” he said. “Because we feel very comfortable that our claims are true.”

Thanks to Louise Story at the New York Times for the story and the quotes.

This entry was posted on Friday, March 21st, 2008 at 11:40 amand is filed under Business, Technology. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.