In a world where social media companies are getting bought for $19 billion, Klout’s acquisition for $200 million is pretty paltry.
The once mighty social influence scoring startup was acquired by social software maker Lithium Technologies for a mix of cash and Lithium private stock.
This could be the beginning of a rebirth for Klout. The startup was initially extremely popular when it was launched, as people used it to score their social influence. But the scoring system quickly got to everyone’s heads. People started using their high Klout scores to discriminate against lower Klout scores and events started rating nobodies higher than actual influential people just because of their social media prowess.
Getting a mass of Twitter followers raised your score, but so did many other nebulous factors which Klout didn’t really disclose. This led to to the ridiculous situation of tech evangelist Robert Scoble having a higher Klout score than President Obama, which dented the apps scoring credibility.
Klout also missed a trick by failing to make its technology useful to marketers early enough. Nowadays, everyone’s talking about influencers and getting people to advocate your brand online. With its ability to identify and rate the most influential people, Klout definitely had some value to give marketers, which it tried to do with analytics and content curation offerings. Ultimately other platforms started doing this better, and Klout’s relevance in the marketplace declined.
However, Klout’s integration with Lithium’s platform could give it that much needed value for marketers as Lithium’s already built an enterprise social platform. “With Klout, Lithium fully delivers on its vision of building a trusted online connection between consumers and the brands they care about,” said Rob Tarkoff, Lithium President and CEO. “Trust is the currency online. For consumers, a trusted expert provides greater confidence in making purchases and getting advice. For brands, building a trusted reputation allows them to better find and keep customers.”
At the moment, it sounds like Lithium will be leveraging Klout’s reserves of consumer data, but we’ll have to wait and see how its scoring system gets integrated with the larger platform.