Lithium Confirms Acquisition of Klout In $200 Mn. All Stock Deal

Social Customer Experience Management Company Lithium Technologies has confirmed acquisition of Klout, a startup that gives scores to rate social media influence of users.

Lithium acknowledged the development on its website; however speculations about the same were rife way back in February as reported by Re/code. Interestingly, though the industry insiders estimate the value of Klout to be somewhere around US$ 200 Million, no cash has changed hands. Lithium has bought Klout in an all–stock deal and Lithium CEO Rob Tarkoff didn’t sugar–coat the fact saying “We are a private company. This was a stock deal. If the reports on the value of Klout are true, that makes Lithium an extraordinarily valuable company and I’m happy about that.”

In simpler terms, Klout founders Joe Fernandez and Binh Tran have been offered stock of Lithium Technologies in lieu of handing over their company and associated technologies. Founded in 2008, Klout made just US$ 10 Million last year. But Lithium is confident that the company is well on its way to profitability within this year or the next.

Klout had become notoriously famous for claiming to measure the ‘Influence’ of an internet and social media user. Using as–yet undisclosed algorithms, Klout was able to summarize the influence of the user in a number which appeared to be Percentage Points and even kept varying, but never reached 100. The list included people, brands, companies, etc.

Basically anyone that could cause a ripple in the Social Media wave or crease in the Social Media fabric was considered an ‘influencer’ and assigned a rating. Any Klout rating higher than 50% meant the person or brand was an active member on the Social Media scene. Higher scores meant they could effectively steer a wave or cause a strong ripple. Some of the top ‘influencers’ on the web according to Klout were USA President Barrack Obama (92), Lady Gaga (94), according to Mashable.

Despite the simplistic approach to evaluating a person’s online influence, Klout never explained exactly how it calculated the score and this drew skepticism. However, Lithium has bought Klout apparently to extend its core business reports Re/code. Moreover, the controversial word ‘influence’ is being ditched in favor of measuring “reputation and expertise,” shared Tarkoff.

Lithium is especially interested in Klout’s Big Data assets. Additionally, Klout does sport an illustrious client list that includes popular brands like Doritos, American Airlines, McDonald’s and many more. Though Klout may not continue as an independent company, the acquisition will hopefully ease the frenzy Klout had once caused.

[Image Credit | Re/code]