Shares in technology firm Phorm plunged by more than a third this morning after BT said it had no immediate plans to use its services.
Broadband giant BT was a key player in the development of Phorm's Webwise system, which uses information about which sites an internet user visits to target them with relevant advertising on subsequent pages.
However, BT has now decided not to go ahead with Webwise, which sent Phorm's shares tumbling by one-third to 330p.
"Given our public commitment to developing next generation broadband and television services in the UK we have decided to weigh up the balance of resources devoted to other opportunities," said BT.
"Given these resource commitments, we don't have immediate plans to deploy Webwise today. However the interest based advertising market is extremely dynamic and we intend to monitor Phorm's progress with other ISPs and with Webwise Discover before finalising our plans."
James Wheatcroft, an analyst at Evolution Securities, said: "The news is disappointing. The UK has been persistently difficult for Phorm and this remains the case. However, we retain our positive recommendation based on overseas development and deployment, in particular Korea. The fundamental Phorm proposition remains highly attractive."
