13 ms·

Klout acquired for $200 million by Lithium Technologies

105 points by mikegreenspan 13y ago

seivan 13y ago
“Lithium Technologies, a provider of social customer experience solutions for the enterprise.” I feel like it doesn't matter if you build something amazing. Without the pedigree, you wouldn't be acquired for 200M by a social customer experience enterprise solution.
- orthecreedence 13y ago
  Their mission might seem generic to you, but I hear they actually have synergistic agile processes with a laser focus on industry standard value-add technologies.
  - cordie 13y ago
    Yes! These are the things your want to hear from companies :)
  - jpatokal 13y ago
    And by acquiring Klout, they now have Big Data in The Cloud!
mulligan 13y ago
I was pretty sure this happened a month or two ago, but I guess it is now official: http://www.businessinsider.com/klout-acquired-2014-2 http://www.businessinsider.com/klout-acquired-2014-2
- deleted 13y ago
  [deleted]
yid 13y ago
I, too, have a random number generator that I am willing to part with on very reasonable terms, cash/equity split negotiable.
- cpncrunch 13y ago
  LOL. Does anyone even use Klout any more? It always seemed a bit pointless.
  - pyrocat 13y ago
    social media obsessed marketers, so, not really.
    - prawn 13y ago
      My wife and a number of friends work in social media and marketing. Haven't heard anyone mention Klout other than in a joke for a long time.
  - zachinglis 13y ago
    Did anyone really use it in the beginning other to stroke their ego when they were feeling a bit down? :)
- bane 13y ago
  It's too bad they didn't sell to Facebook, they could have turned fraction of a billion dollars into whole numbers of billion dollars.
deleted 13y ago
[deleted]
dude_abides 13y ago
200 million wow! When I think of Klout, I can only think of this brilliant XKCD: https://xkcd.com/1057/ https://xkcd.com/1057/
cordie 13y ago
I really can't understand this. Do I just not understand how the "game" is played. OR am I just missing something? Someone please enlighten me!
- brk 13y ago
  Honestly, yeah, you probably don't understand how the game is played if that is a legitimate question. There seems to be a wave a social-related acquisitions going around. If you have a product that can be virally shared, or produces rankings or scores that people get caught up in competing for, you could be a potential acquisition target. I think a lot of people on HN focus on solving real problems and making the world "better", which is certainly a wonderful endeavor. But that's not the path to mind-numbingly high acquisitions most of the time.
redmaverick 13y ago
Hard to believe that someone is willing to pay $200 million for Klout. Maybe, I am missing something? Just for fun, a year back, I made a simple Klout clone which was dependent on just Google search results, twitter followers, retweets and total number of tweets. I used a few known Klout scores as the seed data and generated a simple Heuristic to calculate Klout scores. I then tested it with around 100 celebs and regular people. The scores were remarkably similar to Klout's actual scores. What were the (Lithium Technologies) VC's thinking?
- Crito 13y ago
  Hopefully this was purely an acquihire and the product is being shitcanned.
amorphid 13y ago
Klout's Klout score just went up. They'd have gotten an even higher valuation if they'd authorized access to their to Klout's Facebook page.
- skeletonjelly 13y ago
  They've created a feedback Klout.
ThomPete 13y ago
Ok trying to make sense of this, So Lithium I understand. They make social media monitoring, analytics, management tools make sense. Klout on the other hand? Besides it being a joke for most of us it's also I guess a huge database of potential customers and some smart engineers. So Lithium paid $200M for a primarily some talent and a giant online rolodex? Hmmm
- thrownaway2424 13y ago
  The numbers are just made up. The article says "mix of cash and private shares" but let's face it, that could mean $10 in cash. Lithium acquires Klout by giving Klout shareholders some fraction of the combined Lithium+Klout entity. Then they value the combined entity with an arbitrarily high number until everyone seems happy. This inflation factor is written down on the balance sheet as "goodwill" which is later reduced in value from billion of to zero dollars. Nobody is really harmed in this process.
  - boomzilla 13y ago
    And everyone involved gets a huge clout inflater in their resumes :)
27182818284 13y ago
Klout's score leave a bad taste in my mouth. Like people actively trying to separate the cool kids by designer clothes or something. Also PG's thoughts (https://news.ycombinator.com/item?id=3887779 https://news.ycombinator.com/item?id=3887779) on it from two years ago still come to my mind because I too see powerful people skipped over completely by it. Eh.
petercooper 13y ago
Finally, an acquisition whose numbers make Whatsapp and Instagram look sane in comparison.
dpcheng2003 13y ago
As a startup founder, let me take the contrarian view on this because I can see how it all went wrong. Klout, for the most part, had a very ambitious goal. Given all our activity (direct or indirect) that is being captured on social networks and general internet activity, there was some inherent value (which we'll call a "clout score") in just knowing who was the "most popular" on these networks. Now imagine you took in all the interest-graph related and search data, and refined that "clout score" to the niches and groups where that individual was most influential. In this hypothetical alternate universe, you can use clout scores and deduce, for example, that "so-and-so" was a more influential voice in the battery materials science community (i.e, cathodes) because her white papers were being shared more often on social networks and getting more backlinks. But Klout didn't do that. Klout realized that to get to market quickly, they applied an arbitrary algorithm to social activity, which would encourage artificial activity on Klout to "game" the system. In another different alternate universe, this would be applauded as a successful growth hack and Klout would be filing their S-1 today. But in our universe, people saw the algorithm as hackneyed, particularly when Justin Bieber had a higher Klout score than the US president. This go-to-market strategy was likely (I'm presuming) influenced by VC investor dollars and the perceived need to be always growing, driven by TechCrunch mentions and HackerNews front page posts. And to some extent, they were successful. They raised a lot of venture dollars, cashed out a few early employees (again, presuming) and convinced some really smart people to join and grow Klout. But now that they've sold out, they can never do what they wanted to do. And in some ways, they've tainted that idea for others who may appreciate the "clout score." So selling out for $200M--for recurring revenue from large brands, patents associated with social activity scoring (didn't fact-check this but guessing) and great employees--is not a bad outcome for Klout or for Lithium. But I'm sure once upon a time, Joe Fernandez (the founder), had a grander vision. This is hardly a bad consolation prize, but what if...
- jusben1369 13y ago
  I kind of agree. It really is a great idea that's super valuable. It was just too early or poorly executed. Someone will do it better in the future. For all the mocking developer folks here think of Klout as GitHub for marketers/influencers (if done correctly) It would allow you to get a view into how influential this person really was just as now days you can learn a lot about a developer by looking at GitHub. That can drive all sorts of hiring/contracting/engagement experiences per year. That's a big market.
chadrs 13y ago
This makes me feel like my similar site, Klout Penis should be worth at least $1M, right? http://kloutpenis.com/ http://kloutpenis.com/
rabino 13y ago
Some investor got his klout score up today
cmis 13y ago
This article and most folks are missing the point, Lithium hasn't raised nearly enough to pay a meaningful amount in cash, maybe enough for investors to get their money back. The $200m value was in funny-money private company stock which at inflated valuations is like buying hotels with monopoly money. Entrepreneurs deserve incredible respect for what they create but lets call things what they are, this wasn't a $200m exit.
- hkmurakami 13y ago
  I wish this fact were more prominent, so that this news wouldn't dissuade those who are interested in non-fluffy ideas as much.
thkim 13y ago
With this acquisition I have to say that there is a technology bubble right now. Someone may make some smart arguments to justify the deal, but even with all the reasonable factors considered it is extremely unlikely that Klout is worth $200MM.
Aloha 13y ago
I'm somewhat amazed at a 200m valuation.
jdh 13y ago
Stock for stock deal. Price is arbitrarily set... All that matters is the percentage. If klout got ten percent, lithium just said they're value is $2B. Klout did have a cool looking office for sure. Hard to find that in SF today.
kartman 13y ago
is this that trick of a "headed soon to IPO company" acquiring something largely in stock to give itself a big baseline and market justified valuation ahead of IPO. both companies are happy and the sucker is the first guy in line for IPO stock.
gobengo 13y ago
Klout couldn't make money doing their score thing. Their investors told them to focus on b2c after instagram sold big. It didn't work. Lithium is quite successful in enterprise forum and support software, which is a broader market than you'd think. Enterprise companies interested in social are really into 'trending' stuff and 'brand affinity' of their audience across all channels. Lithium will book 200mm in additional revenue from Klout's tech in the next 5 years, because each of their deals are like 6 figures per year.
thescrewdriver 13y ago
Glad to see another successful startup which uses Scala :) http://engineering.klout.com/ http://engineering.klout.com/
dexcs 13y ago
$200M for ~150M Users. Bad deal if you compare it with for example, whatsapp... But hey, at least they landed a exit.
- AznHisoka 13y ago
  150M users? Where did u come up with that? That's like saying Google owns 10 billion sites because they crawl 10 billion sites.

105 points by mikegreenspan 13y ago

“Lithium Technologies, a provider of social customer experience solutions for the enterprise.” I feel like it doesn't matter if you build something amazing. Without the pedigree, you wouldn't be acquired for 200M by a social customer experience enterprise solution.

orthecreedence 13y ago
Their mission might seem generic to you, but I hear they actually have synergistic agile processes with a laser focus on industry standard value-add technologies.
- cordie 13y ago
  Yes! These are the things your want to hear from companies :)
- jpatokal 13y ago
  And by acquiring Klout, they now have Big Data in The Cloud!

mulligan 13y ago

I was pretty sure this happened a month or two ago, but I guess it is now official: http://www.businessinsider.com/klout-acquired-2014-2 http://www.businessinsider.com/klout-acquired-2014-2

deleted 13y ago
[deleted]

yid 13y ago

I, too, have a random number generator that I am willing to part with on very reasonable terms, cash/equity split negotiable.

cpncrunch 13y ago
LOL. Does anyone even use Klout any more? It always seemed a bit pointless.
- pyrocat 13y ago
  social media obsessed marketers, so, not really.
  - prawn 13y ago
    My wife and a number of friends work in social media and marketing. Haven't heard anyone mention Klout other than in a joke for a long time.
- zachinglis 13y ago
  Did anyone really use it in the beginning other to stroke their ego when they were feeling a bit down? :)
bane 13y ago
It's too bad they didn't sell to Facebook, they could have turned fraction of a billion dollars into whole numbers of billion dollars.

deleted 13y ago

[deleted]

dude_abides 13y ago

200 million wow! When I think of Klout, I can only think of this brilliant XKCD: https://xkcd.com/1057/ https://xkcd.com/1057/

cordie 13y ago

I really can't understand this. Do I just not understand how the "game" is played. OR am I just missing something? Someone please enlighten me!

brk 13y ago
Honestly, yeah, you probably don't understand how the game is played if that is a legitimate question. There seems to be a wave a social-related acquisitions going around. If you have a product that can be virally shared, or produces rankings or scores that people get caught up in competing for, you could be a potential acquisition target. I think a lot of people on HN focus on solving real problems and making the world "better", which is certainly a wonderful endeavor. But that's not the path to mind-numbingly high acquisitions most of the time.

redmaverick 13y ago

Hard to believe that someone is willing to pay $200 million for Klout. Maybe, I am missing something? Just for fun, a year back, I made a simple Klout clone which was dependent on just Google search results, twitter followers, retweets and total number of tweets. I used a few known Klout scores as the seed data and generated a simple Heuristic to calculate Klout scores. I then tested it with around 100 celebs and regular people. The scores were remarkably similar to Klout's actual scores. What were the (Lithium Technologies) VC's thinking?

Crito 13y ago
Hopefully this was purely an acquihire and the product is being shitcanned.

amorphid 13y ago

Klout's Klout score just went up. They'd have gotten an even higher valuation if they'd authorized access to their to Klout's Facebook page.

skeletonjelly 13y ago
They've created a feedback Klout.

ThomPete 13y ago

Ok trying to make sense of this, So Lithium I understand. They make social media monitoring, analytics, management tools make sense. Klout on the other hand? Besides it being a joke for most of us it's also I guess a huge database of potential customers and some smart engineers. So Lithium paid $200M for a primarily some talent and a giant online rolodex? Hmmm

thrownaway2424 13y ago
The numbers are just made up. The article says "mix of cash and private shares" but let's face it, that could mean $10 in cash. Lithium acquires Klout by giving Klout shareholders some fraction of the combined Lithium+Klout entity. Then they value the combined entity with an arbitrarily high number until everyone seems happy. This inflation factor is written down on the balance sheet as "goodwill" which is later reduced in value from billion of to zero dollars. Nobody is really harmed in this process.
- boomzilla 13y ago
  And everyone involved gets a huge clout inflater in their resumes :)

27182818284 13y ago

Klout's score leave a bad taste in my mouth. Like people actively trying to separate the cool kids by designer clothes or something. Also PG's thoughts (https://news.ycombinator.com/item?id=3887779 https://news.ycombinator.com/item?id=3887779) on it from two years ago still come to my mind because I too see powerful people skipped over completely by it. Eh.

petercooper 13y ago

Finally, an acquisition whose numbers make Whatsapp and Instagram look sane in comparison.

dpcheng2003 13y ago

As a startup founder, let me take the contrarian view on this because I can see how it all went wrong. Klout, for the most part, had a very ambitious goal. Given all our activity (direct or indirect) that is being captured on social networks and general internet activity, there was some inherent value (which we'll call a "clout score") in just knowing who was the "most popular" on these networks. Now imagine you took in all the interest-graph related and search data, and refined that "clout score" to the niches and groups where that individual was most influential. In this hypothetical alternate universe, you can use clout scores and deduce, for example, that "so-and-so" was a more influential voice in the battery materials science community (i.e, cathodes) because her white papers were being shared more often on social networks and getting more backlinks. But Klout didn't do that. Klout realized that to get to market quickly, they applied an arbitrary algorithm to social activity, which would encourage artificial activity on Klout to "game" the system. In another different alternate universe, this would be applauded as a successful growth hack and Klout would be filing their S-1 today. But in our universe, people saw the algorithm as hackneyed, particularly when Justin Bieber had a higher Klout score than the US president. This go-to-market strategy was likely (I'm presuming) influenced by VC investor dollars and the perceived need to be always growing, driven by TechCrunch mentions and HackerNews front page posts. And to some extent, they were successful. They raised a lot of venture dollars, cashed out a few early employees (again, presuming) and convinced some really smart people to join and grow Klout. But now that they've sold out, they can never do what they wanted to do. And in some ways, they've tainted that idea for others who may appreciate the "clout score." So selling out for $200M--for recurring revenue from large brands, patents associated with social activity scoring (didn't fact-check this but guessing) and great employees--is not a bad outcome for Klout or for Lithium. But I'm sure once upon a time, Joe Fernandez (the founder), had a grander vision. This is hardly a bad consolation prize, but what if...

jusben1369 13y ago
I kind of agree. It really is a great idea that's super valuable. It was just too early or poorly executed. Someone will do it better in the future. For all the mocking developer folks here think of Klout as GitHub for marketers/influencers (if done correctly) It would allow you to get a view into how influential this person really was just as now days you can learn a lot about a developer by looking at GitHub. That can drive all sorts of hiring/contracting/engagement experiences per year. That's a big market.

chadrs 13y ago

This makes me feel like my similar site, Klout Penis should be worth at least $1M, right? http://kloutpenis.com/ http://kloutpenis.com/

rabino 13y ago

Some investor got his klout score up today

cmis 13y ago

This article and most folks are missing the point, Lithium hasn't raised nearly enough to pay a meaningful amount in cash, maybe enough for investors to get their money back. The $200m value was in funny-money private company stock which at inflated valuations is like buying hotels with monopoly money. Entrepreneurs deserve incredible respect for what they create but lets call things what they are, this wasn't a $200m exit.

hkmurakami 13y ago
I wish this fact were more prominent, so that this news wouldn't dissuade those who are interested in non-fluffy ideas as much.

thkim 13y ago

With this acquisition I have to say that there is a technology bubble right now. Someone may make some smart arguments to justify the deal, but even with all the reasonable factors considered it is extremely unlikely that Klout is worth $200MM.

Aloha 13y ago

I'm somewhat amazed at a 200m valuation.

jdh 13y ago

Stock for stock deal. Price is arbitrarily set... All that matters is the percentage. If klout got ten percent, lithium just said they're value is $2B. Klout did have a cool looking office for sure. Hard to find that in SF today.

kartman 13y ago

is this that trick of a "headed soon to IPO company" acquiring something largely in stock to give itself a big baseline and market justified valuation ahead of IPO. both companies are happy and the sucker is the first guy in line for IPO stock.

gobengo 13y ago

Klout couldn't make money doing their score thing. Their investors told them to focus on b2c after instagram sold big. It didn't work. Lithium is quite successful in enterprise forum and support software, which is a broader market than you'd think. Enterprise companies interested in social are really into 'trending' stuff and 'brand affinity' of their audience across all channels. Lithium will book 200mm in additional revenue from Klout's tech in the next 5 years, because each of their deals are like 6 figures per year.

thescrewdriver 13y ago

Glad to see another successful startup which uses Scala :) http://engineering.klout.com/ http://engineering.klout.com/

dexcs 13y ago

$200M for ~150M Users. Bad deal if you compare it with for example, whatsapp... But hey, at least they landed a exit.

AznHisoka 13y ago
150M users? Where did u come up with that? That's like saying Google owns 10 billion sites because they crawl 10 billion sites.