Company Will Monitor Phone Calls to Tailor Ads

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Source: New York Times

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Pudding Media, a start-up based in San Jose, Calif., is introducing an Internet phone service today that will be supported by advertising related to what people are talking about in their calls. The Web-based phone service is similar to Skype’s online service — consumers plug a headset and a microphone into their computers, dial any phone number and chat away. But unlike Internet phone services that charge by the length of the calls, Pudding Media offers calling without any toll charges.

The trade-off is that Pudding Media is eavesdropping on phone calls in order to display ads on the screen that are related to the conversation. Voice recognition software monitors the calls, selects ads based on what it hears and pushes the ads to the subscriber’s computer screen while he or she is still talking.

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Mr. Maislos said that during tests he noticed that the content had a tendency to determine conversations.

“The conversation was actually changing based on what was on the screen,” he said. “Our ability to influence the conversation was remarkable.”

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