Back in February of last year when we interviewed former NebuAD CEO Bob Dykes, the company was optimistic that they were at the crest of a fortune in behavioral advertising income. NebuAD had struck early trial arrangements with dozens of ISPs, who let NebuAD insert hardware on their networks that would track user behavior down to the minute spent at each site, allowing the company to then target those users with interest-tailored advertisements.

Though the sale of user data without consent was not new, somehow NebuAD's business model got under the skin of consumers and politicians, some of whom argued that the system violated consumer privacy and wiretap laws. As we've stated in the past, NebuAD's cookie-based system opted users out of receiving the system's targeted ads, but it didn't opt them out of data collection and sales.

Many ISPs also didn't effectively inform consumers, simply slipping new fine print into their terms of service. Ultimately the negative attention sent ISPs running for the hills at the behest of their lawyers, though NebuAD and ISPs still face lawsuits for privacy violations. ISPs, though they stood to make an estimated $5 per user, per month off of the system -- blamed NebuAD alone for the plan.

NebuAD's story officially ended over the weekend, as court documents (pdf) indicate that the carrier started laying off employees shortly after CEO Dykes testified before worried lawmakers last summer. Dykes himself left the company last fall. While the company had publicly stated they were simply modifying their business model, the court documents indicate that NebuAD now officially no longer exists.

Update: One user in the UK writes in to note that in the UK, where privacy laws are less stringent, NebuAD has re-assembled itself as a company named Insight Ready.