Lithium Technologies Acquires Klout–Ties Social Media Influence to Brand Sentiment

March 27, 2014

Lithium Technologies Inc. confirmed its acquisition of the social Web company Klout Inc., which was an early player in measuring people’s influence online.

Lithium Chief Executive Rob Tarkoff said it was a stock deal. Goodwin and Procter, a law firm representing Klout in the deal, said the amount was about $200 million.

Lithium, which helps brands build communities of fans online, claims at least 100 million unique users. It plans to combine Klout’s ability to help individuals measure and influence their online reputations with Lithium’s ability to track and measure online conversations about brands.

“This redefines who Lithium is and is a relaunch of the company,” said Mr. Tarkoff, a former Adobe Systems executive who joined Lithium in 2011.

Klout CEO Joe Fernandez, who co-founded the company in 2008, will become a general manager and senior vice president of Lithium’s Klout business, and the companies will combine customers, according to Mr. Tarkoff. These include American Airlines and McDonalds for Klout and Sephora and Best Buy for Lithium.

Mr. Fernandez said while it felt “weird” to sell his company to Lithium, it was also “a pretty easy decision,” adding that more than 200,000 businesses are registered and using Klout, but the company’s marketing team had been as little as one person and the sales team was four people.

“The business opportunity was always there but organizationally we were not mature enough to take advantage of it,” he said. “This jumps a big hurdle…My passion from starting Klout was to change the way consumers and brands interact.”

Klout has raised at least $40 million from Kleiner Perkins Caufield & Byers, Mayfield Fund and Institutional Venture Partners, while Lithium has raised about $150 million from investors including New Enterprise Associates.

Kleiner Perkins Partner Chi-Hua Chien joins Lithium’s board.