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Free Internet Phone's 'Price': Ads Based On Eavesdropping

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By CHRIS FOURNIER, Bloomberg News

Published: September 25, 2007

Pudding Media opened the next front in Web advertising Monday as the California startup introduced a service that monitors Internet phone calls and dishes up promotions based on what people say.

Consumers place calls for free over their computer, talking into a microphone, and agree to let Pudding eavesdrop and show on-screen ads based on the conversations.

Advertisers select from tens of thousands of keywords, similar to how they buy ads linked to the text of Internet searches. The service may show links to movie trailers to people talking about films, or send game statistics to sports fans, San Jose, Calif.-based Pudding said in a statement.

'The content we display is not news of the day; rather, it's related to things you talk about,' Chief Executive Officer Ariel Maislos, 34, said in an interview. 'It's a platform that allows people to make money on voice services that have, so far, been given out for free.'

Pudding, which uses voice-recognition software to spot keywords, has signed up more than 10,000 users, Maislos said. He declined to give an exact number and wouldn't disclose how many advertisers are working with the company.

To deflect privacy concerns, Pudding 'dumps' data from the calls as soon as they end, Maislos said. The company also has retained the services of former Microsoft Corp. Chief Privacy Officer Richard Purcell, he said.

Consumers can test the service at www.thepudding.com. The closely held company's investors include Opus Capital, according to its Web site.

Pudding employs about 25 people in the United States and Israel, Maislos said.

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