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Klout acquired for $200 million by Lithium Technologies

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Re: Klout acquired for $200 million by Lithium Technologies

#41

Post by derefr »

dpcheng2003 wrote: post #30
mantrax3 wrote: post #28

Earlier quoted context omitted.

> "But in our universe, people saw the algorithm as hackneyed, particularly when Justin Bieber had a higher Klout score than the US president." Maybe Klout was wrong with this particular arrangement, or maybe your assumptions about who has more influence are wrong. Ever thought about that? After all, "entertainment clout" can be very quickly capitalized as "political clout", as Mr. Terminator has demonstrated. When i…

I respectfully disagree with your argument because that's not the one I'm making. I think the general consensus from Klout detractors is that a single "score" cannot encompass someone's influence. Some people are more influential in certain circles than others. Of course, there is a broad-based influence score you can apply to people, in the same manner that Super Bowl ads are expensive because they reach a broad-bas…

> a single "score" cannot encompass someone's influence

I would argue the opposite. There is one ultimate "score" of a person's influence: their wealth.

While not all of a person's influence is delimited in dollars at any given time, almost every kind of influence is fungible to dollars. You can, for example, "spend" social capital by burning bridges asking friends for personal monetary loans.

It's actually pretty unclear to me whether President Obama's or Justin Bieber's influence would liquidate into a greater amount of money. But it's certainly a question that has a factual answer, and it's a useful answer, unlike a Klout score.

Re: Klout acquired for $200 million by Lithium Technologies

#42

Post by mattgreenrocks »

dpcheng2003 wrote: post #21

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…

Grander vision? Klout should die because it's trying to create a numeric score to measure e-popularity. Why cater to people wasting their life chasing a stupid metric? Better to leave it highly ambiguous.

From a geek perspective, I hate social with an intense passion. It drags the politics and power hierarchies of real-life onto the Internet, and reinforces the status quo.

Re: Klout acquired for $200 million by Lithium Technologies

#44

Post by thrownaway2424 »

ThomPete wrote: post #18

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

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.

Re: Klout acquired for $200 million by Lithium Technologies

#45

Post by dotBen »

dpcheng2003 wrote: post #21

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…

Klout also realized it would never have the granular level of access to the interest graphs on the networks it was - pardon the expression - leaching off of.

I remember a senior Twitter staff member pointing out that if Klout really proved a market, they could simply compute all of this information directly rather than inefficiently via the API platform and firehose - with better results from access to more data, and the ability to sell directly to advertisers who they already had relationships with through their sales team.

Klout were never going to gain the level of access the needed to the graphs on the various networks they utilized in order to realize their longer-term goals. Which, btw, ultimately highlights yet another fallacy of the platform economy.

Re: Klout acquired for $200 million by Lithium Technologies

#46

Post by boomzilla »

thrownaway2424 wrote: post #44
ThomPete wrote: post #18

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

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 redu…

And everyone involved gets a huge clout inflater in their resumes :)

Re: Klout acquired for $200 million by Lithium Technologies

#47

Post by mbesto »

dpcheng2003 wrote: post #30
mantrax3 wrote: post #28

Earlier quoted context omitted.

> "But in our universe, people saw the algorithm as hackneyed, particularly when Justin Bieber had a higher Klout score than the US president." Maybe Klout was wrong with this particular arrangement, or maybe your assumptions about who has more influence are wrong. Ever thought about that? After all, "entertainment clout" can be very quickly capitalized as "political clout", as Mr. Terminator has demonstrated. When i…

I respectfully disagree with your argument because that's not the one I'm making. I think the general consensus from Klout detractors is that a single "score" cannot encompass someone's influence. Some people are more influential in certain circles than others. Of course, there is a broad-based influence score you can apply to people, in the same manner that Super Bowl ads are expensive because they reach a broad-bas…

Any system which one party creates for a set of players will effectively be gamed by a more willing and able actor.

> 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.

This as I understand it, is your argument on why Klout should exist. To paint an even simpler picture, this effectively determining a signal-noise ratio for people. Unfortunately, this is flawed, because I believe that we as human beings cannot even determine our own signals. Ultimately we have to rely on 3rd party actors to do it for us (call them Mavens, pundits, curators, or what have you). More of my own thoughts on this: http://www.techdisruptive.com/2012/09/18/we-are-far-from-sol...

Re: Klout acquired for $200 million by Lithium Technologies

#48

Post by hkmurakami »

cmis wrote: post #34

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 $200…

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

Re: Klout acquired for $200 million by Lithium Technologies

#50

Post by gobengo »

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.
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