Commercial Progress Update

16 October 2012

Phorm Corporation Limited ("Phorm" or the "Company")

Commercial Progress Update - Initial text advertising results

Phorm (AIM: PHRM), the internet personalisation technology company, is pleased to announce a further update on the operational progress of its commercial deployment in Turkey. Following the start of commercial activities in July, the Company announced on 20 September that it had made significant traction with all three key commercial elements - Users, Publishers and Advertisers. Today we are pleased to announce the initial results of our text advertising product.

Having begun commercial operations in the display advertising space by demonstrating how it could lift the performance of advertising by a factor of at least three, the Company has now demonstrated that it can use ISP data to profitably show targeted text advertising without the involvement of a search engine.

Text advertising accounts for more than half of the global advertising market and is dominated by search since search has been the primary method of associating someone with a keyword level interest. Although there are ways of showing text advertising on third party websites, results have been mixed at best since the content of any one website is not always a strong indicator of a consumer's interest. Phorm, together with its ISP partners, is uniquely positioned to identify repeated, keyword level behaviour and bring revenue from targeted text advertising within reach of most pages on the internet by showing a different text advertisement to each person visiting that web page based up on repeated keyword level interest prior to visiting that site.

The Company tested its text advertising system on more than twenty million advertising impressions, a statistically meaningful sample, across a wide variety of websites and advertisers. Over 20 campaigns were run in sectors such as electronics, travel, fashion, mobile phones, banking and jobs. Based on the results, we were able to conclude that the model was valid with clicks being generated at margins in excess of 80%.

The Company believes that, as it continues to deploy across Turkish ISP users and websites and builds scale over the coming weeks, it will be able to diversify the range of options available to text advertisers in the online advertising market which would represent a significant revenue opportunity to the broader ecosystem of websites in Turkey and markets in which Phorm is deployed. The initial results also identified opportunities to improve both the performance and the process of its text advertising solution, which are currently being implemented. The Company looks forward to growing revenues significantly as commercial operations expand in Turkey based on these excellent initial results.

Kent Ertugrul, CEO of Phorm, commented, "This is truly a major milestone in the development of the business. Text advertising represents over half of the $90bn global advertising market and today, for the first time, we have demonstrated that there is a viable alternative delivery model based on our partnership with ISPs. We are very excited about the prospects of our business in Turkey and are now focused on using the excellent initial results to build revenue aggressively."

For Enquiries

Phorm, Inc.

Mark Williams (analysts & investors) +44 20 7297 2326

Alex Laity (media) +44 20 7297 2710

Liberum Capital +44 20 3100 2222

(Nominated Advisor and Joint Broker)

Chris Bowman

Richard Bootle

Mirabaud Securities LLP +44 20 7321 2508

(Joint Broker)

Jason Woollard

Peter Krens

Hudson Sandler +44 20 7796 4133

Charlie Jack

Charlie Barker

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About Phorm

Phorm is a global personalisation technology company that makes content and advertising more relevant to the consumer. Phorm's innovative platform preserves user privacy and delivers a more interesting online experience.

Phorm's partners include leading Internet Service Providers (ISPs), Publishers, Ad Networks and Advertisers.

Phorm, under the predecessor holding company of the group Phorm Inc., was admitted to the AIM market of the London Stock Exchange in 2007 and has over 140 employees and contractors.

For more information, please visit: www.phorm.com