A management "impasse" has forced the three founders of xrefer, the innovative online library reference service, to leave their operational roles in the company.

President Adam Hodgkin, marketing director Daryl Rayner and technology chief Carl Roach are "no longer in operating roles." Adam Hodgkin described his position as being on "gardening leave" until their official departure in the spring.

CEO John Dove, appointed in October 2003, has taken the helm.

"Losing Adam is certainly a loss, but we had a situation of rigidity," said Dove. "We had an impasse we were being rigid on things we couldn't be rigid on, such as our distribution."

Dove said the two sides disagreed over his policy of reaching the market through strategic distribution partnerships. He said Hodgkin and Rayner thought a direct xrefer sales team was the best way to achieve results. "I believe we cannot be a ProQuest or Ebsco, with a massive sales force," said Dove. "We will use direct sales to seed a market and then we will use a strategic distributor."

Xrefer signed a deal with Thomson Gale in June 2004, which sees Gale sell on xrefer products to academic, school and public libraries in the US and Canada.

"There were a number of differences, but I wouldn't say that was the main one," Hodgkin told IWR. He said that he was extremely unhappy about the turn of events at the company, which he founded in October 1999.

However, Dove told IWR that the founders will remain linked to the company for the time being. "Adam Hodgkin and Daryl Rayner are available to us on a consultancy basis." He added that the parting of the ways was not entirely unamicable. "It was simply a case of 'can we get new input into the company?'" He denied that investors had called for their removal.

Staff at xrefer's Paddington headquarters were saying little about the changes at the top. "Xrefer has simply outgrown its founders. Dove wants to give the market approach a different focus and that caused some friction," said Becky Fishman, head of communications.

Xrefer has signed David Brown, British Library head of publisher relations, to its advisory board to help replace the wealth of industry experience that Hodgkin brought to the company. "David Brown will help us by lending his name and good advice to xrefer," Dove said.

Albert Stevens, who is joining xrefer as chief technology officer, will replace Carl Roach. Stevens has been developing information centres, visualisation technology and user friendly applications for Kaon Interactive, a US specialist in XML-based technology.

Like xrefer's principal US investor Bel  Hatvany, Dove entered the information industry at SilverPlatter, the CD-ROM service that is now part of health information aggregator Ovid. Dove served as president and chief operating officer of SilverPlatter before working for the e-Government Education Program at Harvard University.

Dove aims to make xrefer cashflow positive in 2005. "We are not yet profitable, but we are pretty close to it now," he said.

Information professionals in the UK will remain an important market for xrefer, but there will be an increased focus on the US. "I am looking to change the amount of US content available so that it is two-to-one. At the moment the bias is towards UK-produced content," Dove said.

Xrefer will begin developing technology that enables US users to see US content first when browsing, while UK users will get served UK content.

Dove said the move towards strategic distributors will enable the US focus to become a reality. "You cannot sell in the US with a direct sales model, you will get swallowed up," he warned.