Klout

About Klout

Klout was a San Francisco-based company that developed a platform to measure the social influence of its users across various social media networks. The company was founded in 2008 by Joe Fernandez and Binh Tran. The idea originated from Fernandez's personal experience in 2007 when he had his jaw wired shut for three months after surgery, forcing him to rely solely on social media for communication. This period led him to the realization that word-of-mouth was now scalable and measurable, inspiring him to create a system to quantify online influence.

Klout's core product was the "Klout Score," a numerical value between 1 and 100 that represented a user's online influence. The platform analyzed data from networks like Twitter, Facebook, LinkedIn, and Instagram, measuring factors such as follower count, content engagement (likes, shares, comments), and the influence of a user's own network. The score was calculated using proprietary algorithms and was designed to reflect a user's ability to drive action and conversation online. Klout's platform was a forerunner in quantifying online reputation, essentially helping to create the concept of the modern-day social media influencer.

The company's business model primarily revolved around its "Klout Perks" program. Brands would pay Klout to run campaigns offering free products or exclusive experiences to users who met specific criteria, such as a minimum Klout Score and relevant influential topics. This allowed companies like General Motors, Disney, and Microsoft to connect with influential social media users, who would then ideally generate positive buzz about their products. Klout also intended to provide business analytics to help brands understand their audiences. By 2013, users had claimed over one million Perks across more than 400 campaigns.

After raising significant venture capital, including a $30 million round in 2012, Klout experienced rapid growth. In March 2014, the company was acquired by Lithium Technologies, a social customer experience platform, for approximately $200 million in cash and stock. Despite the acquisition, Klout continued to operate as a standalone service for several years. However, on May 25, 2018, the same day the European Union's General Data Protection Regulation (GDPR) came into effect, Klout was officially shut down by Lithium. The parent company stated the service was not aligned with its long-term strategy and cited the challenges posed by new privacy regulations.