Chinese mobile value-added services firm KongZhong (KONG) said that its co-founder Yunfan Zhou will resign from his position as CEO, effective October 13, 2008.
Zhou will continue to serve as the chairman of the board, and the company's statement says personal reasons have led Zhou to make this departure decision.
KongZhong says it is now considering a number of candidates for the CEO position. Zhou's replacement will take on a massive job of turning the company around. Though KongZhong last week posted its unaudited second quarter 2008 financial results and says total revenues increased 10% sequentially to USD23.52 million, its mobile advertising revenues was only USD357,000. Mobile advertising has long been a hopeful revenue stream for MVAS firms like KongZhong who have been hampered in making money by Chinese telecommunications rules and weak consumer desire to use their services.
In fact, the company's first quarter for 2008 results showed aggregate revenues from China Unicom, China Telecom and China Netcom accounted for approximately 24% of the total first quarter WVAS revenues, while revenues from China Mobile accounted for the remaining 76%. This still shows a large reliance on the company of the good will of these telecommunications companies, which have in the past been fickle in their policies and have directly resulted in revenue and profit losses for KongZhong.