ISPs are tired of not receiving their share of the revenue generated by online ads. Now BT, Carphone Warehouse and Virgin Media – representing more than two-thirds of the UK ISP market – have decided to do something about it.

Phorm is a new type of online co-op, where ISPs can team up to try and grab some of the money made from online advertising too. As it stands, most online ad revenue goes straight to those selling web advertising - to search engines and web portals such as Google, Microsoft/MSN and Yahoo.

London-based Phorm tracks web users and their interests and serves up ads relevant to them. Any website can sign up to Phorm’s Open Internet Exchange advertising platform, from which any money earned will be shared with BT, Carphone Warehouse and Virgin Media, the International Herald Tribune reports.

Surfing history

The three ISP firms will let Phorm have access to users’ surfing history in a bid to target ads more specifically according to users’ interests. For someone interested in music, it would also be possible to have music ads displayed on non-music websites too, as the user moves through cyberspace.

"Webwise, the joint initiative sponsored by our ISP partners, will 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," said Kent Ertugrul, chairman and chief executive of Phorm.

"This is taking targeting to the next level," Jason Carter, managing director of media buying agency Universal McCann Interactive in the UK, told the IHT.

Phorm guaranteed that users would remain anonymous, and that individuals would not be tracked using any personal details; just a number. If you’re worried about privacy and your personal safety online, there’s an option to opt out of the service, which is due to launch next month.

What do you think – are you in favour of more targeted ads, or will the idea make you run towards more controlled websites (such as social networking offerings)? Let us know by leaving a comment below.