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Klout acquired by Lithium.

Stashed in: Kleiner Perkins, @lizgannes, @karaswisher, Klout

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I'm not sure why Lithium would pay $100 million for Klout.

Liz Gannes and Kara Swisher write:

Klout, the online popularity contest startup, is poised to be sold to social customer service company Lithium Technologies.

The deal is signed but not closed, said sources. And, while the numbers are fuzzy given they account for a mix of cash and Lithium private stock, the acquisition is “in the low nine figures” — that is, at least $100 million.

It’s a dead-on fit in terms of topic focus for the two companies, but it’s also a save for San Francisco-based Klout, which had two years ago raised a $30 million Series C round from investors including Kleiner Perkins, Venrock and Institutional Venture Partners, for total funding of more than $40 million. Klout CEO Joe Fernandez has been telling a tale of redemption in recent months, after his company became a bit of a whipping boy for criticism of the vanity of social media.

Lithium provides social customer experience management software for the enterprise. In September, the San Francisco company said that it had raised $50 million in “pre-IPO mezzanine financing,” bringing its own total above $150 million from New Enterprise Associates, Benchmark, Shasta Ventures and others. Its customers include AT&T, BT, Best Buy, Indosat, Sephora, Skype and Telstra. Because it is likely to go public, the price for Klout could be more (or less).

Klout’s business focuses on analyzing who is influential in social media, which is simplified into a score on a scale of 100. The Klout algorithm has been tweaked over the years, especially after scrutiny of why tech pundit Robert Scoble had a higher Klout score than U.S. President Barack Obama. (The reason? Back in 2011, Obama needed to get himself retweeted more.)

Why would Klout (tracks who's influential) be something Lithium wants to buy?

Lithium provides customer management tools for Fortune 500 companies.

Maybe it's so those companies can try to reach influencers?

And so the customer becomes the pawn.

So they want to influence customers? Or they want to turn influencers INTO customers? guess

They turn their customers into influencers, and then use their influencers to do their bidding.  

They're raising an army of influencers.

And why would influencers want to help companies?


Hmmm. So far Klout has taken my time and not given me any money.

I'm pretty sure I don't trust them anymore.

makes sense...what can replace the power of the mighty ad dollar

Sadly, not much.

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