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Lithium acquires $200m Klout to "appeal to both consumer and brand"

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27th Mar 2014
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After letting the rumour mill run its course, Lithium Technologies has finally confirmed its acquisition of social media influence scoring firm Klout, for around $200m.

Lithium, itself a social influencer in terms of the online customer communities it builds, had been hotly tipped to acquire the San Francisco-based company earlier in the month, but a number of questions were raised about how Klout would fit into Lithium's existing framework. 

“With Klout, Lithium fully delivers on its vision of building a trusted online connection between consumers and the brands they care about,” said Rob Tarkoff, CEO and president of Lithium.

“Trust is the currency online. For consumers, a trusted expert provides greater confidence in making purchases and getting advice. For brands, building a trusted reputation allows them to better find and keep customers.”

In a press conference, Tarkoff explained the need for Klout’s consumer appeal in better connecting Lithium’s online communities. He described the combination of the two as being, “a platform that now appeals to both consumer and brand”, and a product that will give consumers more power to decide the influence of brands; in turn helping those brands understand the digital reputation of consumers and help pinpoint interactions more effectively.

“We always refer to the stat that 90% of consumers trust what their friends say online and 15% what brands say,” he added. “Yet brands keep firing things at people untargeted.”     

Principal analyst and founder of Constellation Research, Ray Wang sees the potential in the deal, stating: "Customer profiles are the next big battleground in delivering a continuum of customer experiences in a digital world. It's about knowing who is valuable, trusted, and credible.  The combination of profiles with an engagement platform will provide a powerful combination for customers.”

Earlier in the month Lithium’s chief scientist, Professor Michael Wu told MyCustomer about how brand influencers from outside Lithium’s customer communities could be important to their clients, and how wider influence measurement to identify significant individuals could therefore be of value: 

“A community is really a group of people who are held together by a common interest. And if you look at that definition, these people who have a common interest in your brand – say they are a brand enthusiast – do not necessarily have to be sat in your brand-sponsored customer community, they could be anywhere.

“There are a lot of people that are out in the social web that are essentially a big fan of your brand but they don’t know the existence of your community. So those are people who are actually part of the community that you should address as well, because they have a common interest, and that common interest is the brand.”

Further details are set to be announced about the tool's go-to-market date at the company’s development event, LiNC 2014, in May. 

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