Any company hoping to launch targeted advertising services should be watching the fate of UK start-up Phorm with great interest. In particular, they should take note of what this says about the public’s double standards on privacy.

Phorm is trying to build a new ad platform, serving ads targeted around users’ internet habits and interests. It is hoping to make this acceptable to the general public with reassurances that no personally identifiable information is kept or stored as part of the process.

According to Phorm, the system will know it is serving an ad to a 30-35 year old male looking for a new car insurance deal. It will not know who you are, however.  You are just a random number. It will not even keep your IP address.

Phorm has consulted with every possible stakeholder to assure people the system is privacy-friendly - like the UK Home Office and the UK Information Commissioner - and it has had its privacy system audited by Ernst & Young and 80/20 Thinking, a privacy consultancy. It is inviting anyone with an interest to do their own inspection.

But none of this has really helped with public perception. There has been a blogosphere furore, and Phorm has been branded a spyware company in the press. A UK think tank this week sent an open letter to the Information Commissioner’s office, asserting that Phorm was possibly illegal.

As was seen in Facebook’s Beacon experiment, people are strongly against the idea of targeted advertising. Given any choice in the matter, it seems, they will campaign hard against it.

The attitude is, however, inconsistent with our tolerance for all kinds of other, less overt data collection and targeting. Where people are not explicitly told about targeting they are generally too lazy to protest.

Every Google search is stored for 18 months, complete with IP address and cookie information from a personal computer. There is much more of a profile kept on Google’s servers than on Phorm, yet, even after the issue was raised a year and a half ago by European privacy regulators as a problem, users have not abandoned the search engine in droves. It appears to be too convenient to boycott.

Millions of us carry store loyalty cards that allow supermarkets to closely profile our shopping habits. This is linked to our name and address – but that doesn’t bother any more than a handful of people.

In fact, we hand over our personal information constantly to any number of companies, from signing end-user licensing agreements to use software, to filling in forms to extend warranties on our household goods.

The companies to which we give this data use it for their own targeting – and are notoriously bad at protecting it. Several recent studies have shown that only a minority of companies have adequate data safeguards. Many don’t even know what data they have in their files and couldn’t say if any of it had leaked or been hacked. Big data losses such as the TJX incident are just the tip of the iceberg.

This is not causing major uproar.  However, if a company declares its intention to target us, albeit in as secure a way as possible, we feel outrage. Phorm is in danger of becoming a scapegoat for a general frustration about an information society we no longer feel in control of.

It is a shame, because the company was at least trying to move privacy technology forward to some extent. It may not have gone far enough, but it is a start. Stamping the business out before it has even started will not stop attempts to target advertising, but may simply drive it underground. The lesson from all this seems to be:  if you want to target, just don’t tell anyone you are doing it. They probably won’t notice.

By Michael Steen, FT Netherlands Correspondent

You’re sitting in a traffic jam, late for a meeting, watching the estimated time of arrival on your satnav’s display creep later and later as it takes account of the fact that, right now, you’re not going anywhere. Do you cancel, try another route, or wait it out?

TomTom, the Dutch maker of navigation devices, is claiming to put an end to this kind of dilemma with a new service it launched today in the Netherlands, dubbed High Definition Traffic. It tracks the paths of about 4 million Vodafone mobile phone users to expand the amount of traffic information available.

Traffic information on satnav devices is not exactly new, but they tend to depend on patchy data compiled by sparse roadside cameras and traffic detectors.

Vodafone can track the whereabouts of each phone to within 500 metres and monitor its movement, says Luciën Groenhuijzen, managing director for TomTom Mobility Solutions. He is quick to point out that the data is not linked to the phone users.

The tracking element allows TomTom to strip out pedestrians and people travelling on trains that run alongside motorways. Each user is tracked for one hour before being re-assigned with a new random number.

"We introduced that [the one hour limit] so that we can’t follow someone, even if we don’t know who they are, for a whole day," Mr Groenhuijzen says.

TomTom blends the data collected from Vodafone with existing sources and sends updates to one of its new, €399 units every three minutes. (TomTom includes a year’s traffic information in the price after which it will charge €9.95 a month.)

So does it work? A test of the gadget at the height of Monday morning rush hour in the congested Randstad area around Amsterdam seemed to suggest it does.

Driving from the coast towards Amsterdam, the navigation device shows an accident has closed a lane on the motorway and a parallel main road is also clogged up. The gadget sends our car under the motorway, along a canal and through a village that looks onto fields near Schiphol airport. One feels a little smug.

What happens if everyone buys the gadget? Don’t you lose your edge? Mr Groenhuijzen claims not. The system is so fast at updating, he says, that the TomToms stuck to people’s windscreens would not send them all haring down a B-road into the same village to create a new traffic jam.

It’s nice to hear One Laptop Per Child and Intel have patched up their differences, but will two heads be better than one in solving the problem of providing schoolkids with computers in the developing world?

Stephen Dukker, chief executive of Silicon Valley’s nComputing, thinks not and has a seven-computers-for-the-price-of-one solution of his own.

“Can you do serious work for eight hours on a seven-inch screen?” he asks of the OLPC laptop and Intel’s Classmate PC.

“They are not right for these markets because the support ecosystem is not there and they won’t be as long as it’s charitable - the governments don’t have the people to do the infrastructure.”

“They are products for college students in the developed world who can’t afford a notebook, and I think they would sell very well in our markets.”

Mr Dukker should know: he co-founded eMachines in the 1990s, which helped drive down PC prices in the West to around $400. He says the industry has hit a wall on pricing since, although PCs now have the power of the old mainframe computers.

With this in mind, he is pushing the out-of-fashion idea of thin clients. One PC in a classroom equipped with nComputing’s plug-in card and software can be linked to up to six of its little black boxes, which have connections for keyboards, mice and monitors.

The main PC’s processing power is able to drive an operating system and programs on the other six terminals. With four PCs and the $70 boxes daisy-chained to them, a classroom computer lab for 28 pupils can be set up for a fraction of the normal cost.

NComputing’s solution is gaining traction in rural US school districts and the developing world.

In the UK, Ndiyo is a not-for-profit initiative that combines both charitable aims with a similar belief in thin clients.

Ndiyo, whose commercial spin-off DisplayLink enables multiple monitors to be connected to a PC through a USB connection, has produced a similar black box to nComputing’s, called Nivo.

Nivo will also cost less than $100 and Ndiyo envisages 20 such boxes being run off a single PC server in a developing-world internet café.

Both nComputing and Ndiyo say their solutions are greener as well – standalone PCs tend to consume around 100 watts each, while their thin-client boxes consume just five watts of power.

Life is tough for the medium-sized UK IT consultancy. Last week another one of them – Impact Plus – sought shelter in the arms of a bigger Japanese suitor, Hitachi of Japan.

Impact is one of a long line of independent consultancies that have been acquired by foreign companies. The Indian IT consultancies Tata, Wipro and Infosys have been making small deals to consolidate their foothold in the market.

David Bailey, the co-founder of Impact Plus, who now becomes head of Hitachi’s UK operations, told the FT that before the deal, he had struggled for four years to move the consultancy beyond the £10m turnover bracket.

The company lacked the brand power and financial clout to go after really big deals, found it too expensive to make its own acquisitions, and failed to find attractive-enough offers from venture capital backers. It was either stagnation or a deal with the Japanese.

There is already a big line-up of foreigners in European IT consulting. The Indians are the newer arrivals, while the Americans such as EDS, CSC, Accenture and IBM have been in the market for years. Hitachi’s compatriot Fujitsu has been active in Europe since 1990, when it took majority control of UK’s ICL. 

Europe is an attractive market for foreign IT consultancies as there is still a lot of scope for businesses to improve IT efficiency. Using IT to increase competitiveness is a key theme for the European Commission. The UK in particular has seen huge public sector IT projects such as the £12bn NHS IT revamp. Local government is also generating a huge amount of work as local councils try to meet government savings targets by combining their back office systems.

Mr Bailey said there would be several more acquisitions, with an aim to making Hitachi’s European operations a 500 person, $100m turnover business in the next two and a half years. That is going to mean a lot of growth from 120 employees today.

The next deals are likely to be in France and Germany where there is little or no business yet. The small toe-hold the company has in Spain and Portugal will also be expanded.