ThePudding uses breakthrough technology that makes your conversations fun and interesting.”
–Pudding Media press release

As business models go, this is surely one of the most ill-conceived to come across the decks in some time. This morning Pudding Media announced the beta of “The Pudding”–an advertising-supported Internet phone service that serves up contextually relevant ads to subscribers based on their conversations. How? Pudding’s voice recognition software eavesdrops on calls and selects ads based on what it hears. A conversation about the NSA wiretapping scandal might, for example, serve up a promotion for AT&T. A chat about Pudding Media itself might display an ad for a commemorative edition of George Orwell’s “1984.”

“We saw that when people are speaking on the phone, typically they were doing something else,” Pudding CEO Ariel Maislos (who apparently spent several years doing intelligence work for the Israeli military) told the New York Times. “They had a lot of other action, either doodling or surfing or something else like that. So we said, ‘Let’s use that’ and actually present them with things that are relevant to the conversation while it’s happening.”

Interesting idea, but as Silicon Alley Insider notes, one that’s riddled with problems:

“Why will Pudding Media flop? Four reasons:

1. Free or nearly free phone calls are already available from dozens of companies, including Skype. The difference between two cents a minute and zero cents a minute (for SkypeOut users) is negligible.
2. Except for people trying the service to see how relevant the targeted ads are (of which there will be many, especially after the NYT article), users will be absolutely freaked out by the idea that someone/something is listening to their phone calls.
3. Advertisers will be absolutely freaked out by the potential consumer backlash.
4. PC-based calling is a niche market to start with.”

ThePudding uses breakthrough technology that makes your conversations fun and interesting.”
–Pudding Media press release

As business models go, this is surely one of the most ill-conceived to come across the decks in some time. This morning Pudding Media announced the beta of “The Pudding”–an advertising-supported Internet phone service that serves up contextually relevant ads to subscribers based on their conversations. How? Pudding’s voice recognition software eavesdrops on calls and selects ads based on what it hears. A conversation about the NSA wiretapping scandal might, for example, serve up a promotion for AT&T. A chat about Pudding Media itself might display an ad for a commemorative edition of George Orwell’s “1984.”

“We saw that when people are speaking on the phone, typically they were doing something else,” Pudding CEO Ariel Maislos (who apparently spent several years doing intelligence work for the Israeli military) told the New York Times. “They had a lot of other action, either doodling or surfing or something else like that. So we said, ‘Let’s use that’ and actually present them with things that are relevant to the conversation while it’s happening.”

Interesting idea, but as Silicon Alley Insider notes, one that’s riddled with problems:

“Why will Pudding Media flop? Four reasons:

1. Free or nearly free phone calls are already available from dozens of companies, including Skype. The difference between two cents a minute and zero cents a minute (for SkypeOut users) is negligible.
2. Except for people trying the service to see how relevant the targeted ads are (of which there will be many, especially after the NYT article), users will be absolutely freaked out by the idea that someone/something is listening to their phone calls.
3. Advertisers will be absolutely freaked out by the potential consumer backlash.
4. PC-based calling is a niche market to start with.”