Puddingmedia has developed software that listens to your online phonecalls and displays ads on your computer screen.

For instance, a caller talking about going for dinner might see ads to local restaurants and restaurant review sites, while someone pondering whether to buy a new computer might see ads for computer stores. Relevant unsponsored links also appear.

I am not pleased about this. I don’t care if

The advertising model is similar to that of Google Inc’s Gmail, which shows ads based on scans of the user’s e-mail correspondence. That idea initially raised privacy concerns, but those have abated as users have become comfortable with the system.

Abated my backside. There’s a good reason I sweep my computers with AdAware and Spybot at least twice a week.

The company keeps no record of the phonecalls, but already has plans to expand into the mobile phone market. This would mean ads pop up on your handset once the call is finished.

I’m amazed the AP reporter didn’t look deeper into the privacy issue. He seems to have been happy enought trying out the software and accepting the company’s line on things. I suppose if you rock the boat too much you don’t get invited to these things any more.

The system has begun testing here.