NebuAd Closing Doors After Internet Privacy Woes

In Britain, a similar company called Phorm Inc. has also faced complaints since it struck partnerships with three access providers reaching 70 percent of Britain's broadband market — BT Group PLC, Virgin Media Inc. and Carphone Warehouse Group PLC's TalkTalk.

But Phorm spokesman Justin Griffiths said the company has retained its partners. BT has completed its trial of Phorm's ad-targeting service and expects to deploy it this year.

Griffiths said Phorm asks consumers upfront after they log on whether they want to receive targeted ads. Griffiths added that the company has received assurances from the British government that its technology "can be operated in a lawful manner."

Even so, Richard Clayton from Internet think tank Foundation for Information Policy Research in Cambridge, England, believes Phorm is getting some snubs from potential partners.

"I haven't seen any other ISPs queuing up to associate themselves with Phorm at all," he said. "A number of smaller ones have said they won't go anywhere near it."