We have discussed Phorm quite a bit on this blog, most recently over its upcoming plans to release a web browsing product called Webwise Discover. As you can see from the comments on that post, Phorm has the ability to raise hackles over the controversial technology it plans to deploy.

Phorm works with ISPs to track customer behaviour. It then uses that (albeit anonymous) information to target customers with relevant adverts.

Whilst it is being keenly anticipated by many advertisers and online marketers, who are keen to make use of this level of user targeting, the system faces fierce opposition from privacy campaigners. Some see Phorm as invasion of user privacy. As for website owners, many feel that Phorm gathers information about their visitors that should really be the privilege of the site owner itself, and not a third party.

Whatever your view, one thing is clear: Phorm is under increasing pressure to make its case before it runs out of money. In its latest financial statement, Phorm reveal that it is chomping through its cash at a rate of $1.8m a month.

And that is despite massively slashing its cost base. In the whole of 2008 it got through $48m, which shows the average burn rate was nearer to £3.5m a month,

And all this is despite not making a single penny so far.

So how much longer can it afford to keep going, without either raising more money or actually selling something? Phorm has raised a total of $89m through equity placings so far, and they’ve got just $35m of that left in the bank. That gives them roughly 20 more months - at the current rate - to make it all work.

Phorm are admitting that the struggle to deploy their technology is somewhat uphill.

Even if the current Korean trial of their ‘Webwise Discover’ works out, they still have to convince ISPs to climb on board. Webwise Discover will be made available to them free of charge, in an attempt to demonstrate its potential.

If Phorm doesn’t manage to make it work, that won’t be because of lack of financial opportunity. How many of you website builders could make good use of that much dough?