Launch Agreement

14 February 2008

Phorm, Inc. ('Phorm' or 'the Company')

BT PLC, TalkTalk and Virgin Media Inc confirm exclusive agreements with Phorm

Phorm (AIM: PHRM and PHRX), the advertising technology company, today announces exclusive agreements with UK internet service providers (ISPs) BT PLC, TalkTalk and Virgin Media Inc. Phorm's industry leading technology will enable the companies to offer a new online advertising platform, the Open Internet Exchange (OIX), and a free consumer internet feature, Webwise, which ensures fewer irrelevant adverts and additional protection against malicious websites.

OIX will create a new marketplace for online advertising, that is based on internet users' anonymous browsing activity and ensure consumers receive fewer irrelevant ads. It will also revolutionise current standards of online privacy and fully protect the identity of consumers. Phorm's privacy claims have been validated under best industry practices, both through an independent audit conducted by Ernst & Young (View report PDF) and a Privacy Impact Assessment undertaken by Simon Davies, MD of 80/20 Thinking and Director of Privacy International.

OIX is the first real-time online advertising platform to use fully anonymised ISP data streams. It operates by allowing market participants to define customer advertising "channels" - groupings of users demonstrating interest in specific product and service categories - then uses this information to serve relevant ads based on a user's browsing activity. This benefits advertisers, publishers and consumers alike and introduces a completely new level of effectiveness in online advertising.

The OIX is a marketplace serving campaigns on the most productive inventory for advertisers and helping online publishers increase the value of their websites. Phorm and ISPs will share the incremental revenue created by the efficiency of this new process.

Many leading publishers and advertising agencies have partnered with Phorm for the launch of OIX. They include; FT.com; iVillage; Universal McCann; MGM OMD and Unanimis.
Webwise will be offered free to customers of ISPs partnering with Phorm and will create a safer, more relevant internet. In addition to serving fewer irrelevant ads, Webwise gives greater protection from online fraud by warning users if they inadvertently browse fraudulent websites (sites that obtain sensitive information such as bank details - a practice known as phishing).

Kent Ertugrul, Chairman and Chief Executive of Phorm, said: "We are delighted to unveil OIX. This service will dramatically improve the effectiveness of advertising for online publishers and advertisers. In a world where all websites rely on advertising for their existence this offers the promise of better content for consumers. Meanwhile Webwise, the joint initiative sponsored by our ISP partners, will also benefit consumers by making internet browsing safer as well as more relevant. We are proud to be working with the UK's leading ISPs in this pioneering venture."

Webwise's anti-fraud measures have been welcomed by APACS, the UK payments association, which champions the fight against online banking fraud.

For Phorm Enquiries:
Kent Ertugrul (Chairman & Chief Executive) +44 20 7638 9571
Lynne Millar (Chief Financial Officer)

Citigate Dewe Rogerson +44 20 7638 9571
Simon Rigby
Justin Griffiths

Canaccord Adams Limited +44 20 7050 6500
(Nominated Adviser)
Mark Williams
Andrew Chubb

For ISP Enquiries:
BT
Adam Liversage +44 20 7356 5366

Talk Talk
Mark Schmid +44 20 7282 2834

Virgin Media
James Hill +44 20 7153 1559

About Phorm:
Phorm is an innovative technology company specialising in delivering behaviourally and contextually targeted advertising while preserving users' personal privacy and security.
Phorm's partners include leading Internet Service Providers (ISPs), Publishers, Ad Networks and Advertisers.
Phorm is a Delaware, US incorporated company, with offices in New York and London and Moscow. The Company was admitted to the AIM market of the London Stock Exchange in 2004 and has over 100 employees.
For more information, please visit: www.phorm.com