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UPDATED: Lithium drives community insight with Scout Labs swoop

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12th May 2010
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Online customer communities builder Lithium Technologies has revealed more details about its acquisition of social media monitoring service start-up Scout Labs.

Lithium founder and CEO Lyle Fong has proposed that integrating Scout Labs into the Lithium platform will drive deeper insights into customers' behaviour within customer communities and broadly on the social web.

Lithium will fully integrate Scout Labs’ social media monitoring and analytics into the Lithium platform while continuing to offer Scout Labs’ solution as a stand-alone product.

"Scout Labs brings an analytical approach that our customers have told us is crucial for Social CRM," said Fong. "They record social interactions anywhere on the web and develop a contextually rich analysis of customers’ behaviour over time. When combined with our own deep customer engagement data, this will give our clients the most detailed picture available of their customers’ social behaviour – giving them a competitive advantage as they plan and execute social media marketing and support programs."

Lithium suggests that the more comprehensive picture of social customers drawn from customer community data and social web data will enable businesses to derive a detailed understanding of who their most influential advocates are and how their influences spread, a boon to social marketers. Experts are similarly excited about the proposition.

"Companies have learned that branded customer communities help them gain a deep understanding of their customers’ feelings and emotions," said Esteban Kolsky, founder and principal at ThinkJar, LLC, a consultancy specializing in CRM strategy. "The ability to analyse those sentiments and intentions across the social web has also proved to be a competitive advantage. The integration of broad social media analytics with deep customer community analytics will provide a richer picture of social customers than before, increasing organizations’ ability to attract and retain customers."

It was first revealed last week that Lithium Technologies had purchased Scout Labs for between $20-25 million in stock and cash in order to plug gaps in its product line.

The move came only a week after Adrian Bisaz, the Emeryville, California-based firm’s director of marketing and business development for Europe, the Middle East and Africa, confirmed to MyCustomer.com that new acquisitions were on the horizon.

He said at the time: "In the social media environment, you have to do three things. You have to listen to what’s being said. Then you need to analyse it. And then you need to act on whatever results you get out of the analysis."

While Bisaz claimed that Lithium had a strong analytics offering and was good at catering to the requirements of super-users, he believed that it needed to do more on the listening and monitoring side of the equation. "So you will hear more aspects of growth in this area," he added.

Chief executive and co-founder Lyle Fong told the VentureBeat website last week that a key plus in relation to the acquisition was that Scout had a similar philosophy to Lithium. Both believed that social media tools should not simply be available to marketing and customer teams but rather to everyone in the company in order to bring them closer to customers.

The vendor will continue to sell Scout’s products as standalone offerings, but will also explore ways to integrate them with its own. Scout was set up in 2007 in San Francisco, California, in venture capitalist Minor Ventures’ incubator and it currently employs about 20 people. It has to date raised more than $4 million in funding from the firm alongside El Dorado Venture Partners and Javelin Ventures.

Lithium, which was established in 2001 and employs 120 staff, has so far raised $44 million and was recently valued at $160 million. It includes customers such as Barnes & Noble, Sony and AT&T among its base.

But Fong said that the vendor was open to further acquisitions. "There’s always something new [on the] horizon with the social web. As new technologies pop up, we’ll have to decide whether we should buy it or build it. For now, I think we have our hands full," he told VentureBeat.

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