Martin Higginson, the founder and chief executive of the mobile phone content company Monstermob, has been axed after disagreements over strategy and a poor share price performance.
Mr Higginson has paid the price for his close ties to the ailing UK operation. Niccolo de Masi, formerly of JP Morgan, will take over as chief executive with immediate effect. Mr de Masi has led the company's aggressive acquisition strategy into regions such as the US, China, Russia and the Philippines. It is those regions where Monstermob expects to derive the majority of its profit in future.
Monstermob shares crashed 22 per cent to 153p following a warning that the UK business would only break even at the earnings level in the current year, a £1.5m reduction on previous guidance. Monstermob's share price has fallen 67 per cent from a peak of 462.5p in September.
Ironically, Mr Higginson - dubbed "Lord of the Ring-tones" - defended the company's share price in the freesheet City AM yesterday morning. "It will sort itself out ... at the end of the day, I've only got one backside to kick. They've got to kick my backside if I don't deliver," he said. Mr Higginson holds a stake of about 12 per cent in the company. No pay-off has been agreed but according to the 2005 annual report, Mr Higginson was on a 12-month notice period and earned £160,000 last year.
Hans Snook, the founder of the mobile phone company Orange and chairman of Monstermob, said the axing was "one the most difficult decisions I've ever made". He added that Mr Higginson was "very UK-centric which became problematic." Monstermob has invested heavily in new services in the UK that have not paid off. Monstermob will focus on improving profitability in the UK and rolling out services to emerging markets. Mr Snook said the renewed focus on profitability should help push the share price back over 300p.
Monstermob sells about 26 million downloads a month, including mobile ringtones, video clips, games and gambling services.
The business was founded by Mr Higginson in 2000 and floated in 2003. The stock attracted significant attention due to spectacular growth in the use of products such as ringtones and other downloadable content. The billionaire Barclay brothers own a 3 per cent stake in the company.
Monstermob's prospects in the UK have deteriorated since flotation. The regulator, Ofcom, intervened in the market in 2005 after complaints that customers, often children, were unwittingly signing up to subscription services when trying to buy a single product, notably the "Crazy Frog" ringtone sold by one of Monstermob's rivals.Reuse content