
Lithium Technologies to Acquire Klout - bfriedland
http://recode.net/2014/02/11/exclusive-lithium-technologies-to-acquire-klout/?utm_source=appnet
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nlh
One thing worth noting, for those that are questioning the "sanity" of this or
asking how Klout can be worth $100s of millions, etc:

"...a mix of cash and Lithium private stock..."

So take any publicized valuations with a very very large grain of salt. It's
fuzzy at best to value a deal based on the stock of another company which
itself has a valuation based on the fractional investment pricing of 3rd party
VCs.

(Note: I don't have any skin in this game either way, so please correct me if
I'm wrong somewhere!)

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pbreit
Lithium is pretty late stage so the stock value is probably close to reality.

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AznHisoka
Klout is a perfect example of great marketing trumping great product. Klout
scores influencers, but in reality it's not that much superior to tools like
Followerwonk, BuzzSumo, or Twtrland. But they came up with a score that ppl
could digest, they had a memorable brand, and they created PR with the
gamification of these social scores.

I might be wrong, but the real value if any in Klout is that they have a bunch
of data aggregating social media profiles for a bunch of influencers, but only
some of it is public like Twitter - stuff like Instagram/FB is opt-in (I might
be wrong). But all in all, it's not something you can't gather on your own
with a year worth of development.

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minimaxir
Klout was the first modern "love-to-hate" startup. It's the proto-RapGenius.

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gamache
RapGenius is a bad example. Their product (crowdsourced lyric annotation)
obsoleted other lyrics sites almost immediately. That they had to play the
dirty SEO game is unfortunate, but not surprising, given that they were
competing against a field of even dirtier sites.

Klout, on the other hand, offered little more than reputation snake oil, which
is why few take them seriously and the investors are lucky to be leaving with
the shirts on their back (which is what a low nine-figure sale means). Much
like Quora, there was a focused bubble of intense love, with a very long tail
of disdain outside. Except Quora has a purpose.

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inthewoods
Obsoleted is pretty strong - do you have data to support that?

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bcoates
Have you seen other lyrics sites? They're tripod-level garbage.

Rap Genius:Lyrics Sites::Stack Overflow:Q&A sites

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benologist
That's not what obsoleted means, and subjective. When all you want is lyrics
and the lyrics are the same across all sites the sites themselves are pretty
interchangeable.

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vertex-four
Depends. When I'm looking up lyrics, I'm looking them up to try to figure out
what they mean. Before RapGenius, the only decent crowd-sourced lyric meanings
site was SongMeanings. RapGenius, on the other hand, has a much better
interface for allowing the community to pick apart songs, without any of the
shady stuff (on the site itself, at least).

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inthewoods
All great - but not proof that RapGenius has obsoleted traditional lyrics
sites like azlyrics.com or metrolyrics.com.

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danso
I hate to jump on the Klout-trashing bandwagon...but it definitely was
floundering around. Its new redesign made it look like another generic social
aggregator, contained significantly less data and insights (hard to believe,
but yes), and was unreadable, to boot. But the randomness of the "Klout Perks"
initiative seemed to be a sign of real meandering..."Use Klout and get a deal
on Chicken McNuggets!"
([http://www.publicrelationsprincess.com/2014/02/mcdonalds-
chi...](http://www.publicrelationsprincess.com/2014/02/mcdonalds-chicken-
nugget-publicity-blitz-too-little-too-late.html))

Yeah, hard to say what their pivot was going to be, so this acquisition is a
better outcome than where things seemed to be heading.

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InclinedPlane
Ugh. Klout is the worst sort of horoscope scammy bullshit out there, it sucks
that the industry is so broken that worthless companies like this can make
profitable exits.

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minimaxir
The last valuation for Klout was $200M, and they are being acquired for "low
nine figures" ($100M-$200M). This is far from a profitable exit.

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Cyclone_
[https://xkcd.com/1057/](https://xkcd.com/1057/)

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jumpbug
I don't get it. This is completely baffling to me that this is a company worth
9 figures.

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gamache
And worth nine figures to another company which appears (from TFA) to be worth
nine figures itself. The Valley is amazing sometimes.

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AznHisoka
1\. Raise $100 million.

2\. Hire 100's of talented engineers for above average salaries and perks.

2b. Make them do something that sounds challenging and hard to understand, but
ultimately useless.

3\. Sell to a greater fool as an acqui-hire for $150 million

4\. Earn a few million in profit.

5\. Repeat! (because you didnt get a 100X return, just a slim one)

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gamache
Perhaps the take-away lesson here is that the hiring process hurts a lot, and
companies will pay millions of dollars to avoid it.

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protomyth
So, a startup that hires a bunch of developers to hack as a team on some open
source project and fires quickly then flips the team to a bigger company[1]
could work?!?

sadly, I thought of a domain name for this: teamchurn.com

1) obviously paying a chunk to the team

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alttab
Who would buy a failing start up for $100m? I guess that's why I'm not an
investor.

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Crito
I wonder what Klout's "klout score" would be for themselves, if they examined
their mentions on social media.

I haven't heard anything about this nonsense for months.

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bhc3
Klout's "klout score" = 87.

[http://klout.com/#/user/klout](http://klout.com/#/user/klout)

