EXPERIAN, the credit checking company, is braving mounting concerns over internet privacy with plans to launch a service that will track broadband users’ activity so they can be targeted with advertising.

Through Hitwise, the web-site company it acquired for £120m a year ago, Experian has held talks with internet service providers to sell its monitoring technology.

Observers expect it to compete in part with Phorm, an AIM-listed company that has stirred controversy after being recruited by BT, TalkTalk and Virgin Media to track their 10m customers’ behaviour so they can be sent advertising messages on the websites they are looking at.

However, the key difference is that Hitwise, which describes itself as an “online competitive intelligence service” would play little part in dispatching the advertising to web pages itself, something that Phorm does through its Open Internet Exchange.

“Hitwise is not in the online behavioural targeting business,” a spokesman said.

Phorm’s shares have tumbled 36% since it unveiled its three key clients in February, partly because of a £32m fund-raising for overseas expansion.

Last week, BT was drawn into the privacy row when it admitted to carrying out secret trials of the Phorm technology in late 2006. Jonathan Groo-cock, an analyst at Investec, thinks a revenue sharing model could bring in an extra £85m of sales to BT.

Another trial to be carried out shortly by the two companies will be monitored by the Information Commissioner’s Office, which said: “Clearly the trial should reveal whether this is a service that web users want, whether it is privacy friendly and that users are comfortable with the privacy safeguards put in place by Phorm.”

Kent Ertugrul, Phorm’s chief executive, insists that it tracks users anonymously, replacing their identities with random numbers that are dropped once an ad has been sent. Unlike “cookies” dispatched by many websites to track behaviour, it can also be switched off.

The company has recruiteda heavyweight board, including David Dorman, the former boss of AT&T and Christopher Lawrence, the vice-chairman of Rothschild.

Experian, once part of GUS, is best known for trawling public records and selling the data to banks and retailers.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive