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Summary:

Klout — one of a number of services that are trying to measure influence in social networks such as Facebook and Twitter — has closed an $8.5-million funding round from Silicon Valley powerhouse Kleiner Perkins, and adding Kleiner partner Bing Gordon to its board of directors.

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As social media becomes more mainstream, many companies — especially marketers and advertisers — are desperately trying to figure out how to measure social influence online, apart from simply counting the number of Twitter followers a person has. Klout is one of the services trying to help them do that, and it just got some powerful help of its own: the San Francisco-based startup announced early Monday that it has closed an $8.5-million funding round from Silicon Valley powerhouse Kleiner Perkins Caulfield Byers, and is adding Kleiner partner Bing Gordon to its board of directors.

Klout started out focusing on Twitter, after founder and CEO Joe Fernandez had jaw surgery and spent his recovery posting on the social network and trying to figure out who to follow. The company has since added Facebook activity and LinkedIn content to its database, and is looking to add other social networks and activity as well. “People are really starting to understand the importance of influence on the social web,” Fernandez said in an email. “Obviously getting someone like KP to lead the round is some validation of that, but more importantly you can see it in the fact that we are working with companies like Virgin America, Disney, Fox, Audi and many others.”

Several companies have already experimented with offering special deals to customers who have high Klout scores, in an attempt to bolster word-of-mouth marketing via social media. The Palms Hotel and Casino has used Klout to put together a social influence group, while Virgin had discounts on flights to San Francisco. As social-media activity becomes more commonplace — thanks in part to the rapid growth of Facebook and Twitter — many companies are trying to figure out how to harness that phenomenon as a marketing tool. Salesforce.com CEO Marc Benioff has even talked about using social-networking influence as a method of determining how much to pay his employees.

As Bindu Reddy of MyLikes wrote recently at GigaOM, the social web needs something like Google’s Page Rank as a way of filtering out the noise, and Klout is trying to supply that by measuring a user’s “reach” and other metrics. The latest funding brings the total amount Klout has raised to $10 million, including a round of $1.5 million raised from Zelkova Ventures last April.

In addition to Kleiner Perkins, the most recent financing includes Greycroft Partners, as well as some of the angel investors who previously backed the company, including ff Asset Management, Tom McInerney, Paige Craig, Bobby Yazdani and Howard Lindzon. Klout competes with other social-media analytics companies including PeerIndex (which Techmeme editor Mahendra Palsule looked at recently) and Twinfluence. Twitter has also said it is working on its own influence ranking system.

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  1. I just wish they’d give away more of the secret sauce and explain their ranking algorithm better. A tool would be nice but knowing what influences the influence score gives us communications folks a tangible action plan.

  2. They can’t give away their ‘secret sauce’ for the same reason Google can’t give away their PageRank algorithm – would open them up to gaming. More here – http://sellandcapital.com/2011/01/real-vs-faux-influence-and-why-klout-matters/

  3. Popular on Twitter: Newsweek’s new editor is a movie scribe, Klout gets $8.5 million to figure out the social web, MySpace layoffs are imminent » Nieman Journalism Lab » Pushing to the Future of Journalism Monday, January 10, 2011

    [...] Klout gets $8.5M to create “the Page Rank of the social web” [...]

  4. Michael Schuermann Monday, January 10, 2011

    Klout says it measures influence on Twitter and seeks to “filter out the noise”. But I see quite a number of Travel Tweets who has a lot more “what I had for breakfast” kind of tweets and enjoy higher Klout scores than those who are seriously into travel. Influence seems to be measured by the number of RTs, regardless of the quality of the Tweets. That has to be corrected, I feel.

  5. Akram Benmbarek Monday, January 10, 2011

    Soovox Social IQ is already measuring online Social influence across Facebook, Twitter, and Linkedin.

  6. Yassir Bougendar Tuesday, January 11, 2011

    Not surprised that Klout got funded. It proves that the influence measurement/marketing is puncturing the pain point for the industry. There is a need to measure influence across entire social web, not just twitter – Soovox.com ‘s Social IQ – it is a social influence metric application that measures a user’s ability to sway others’ opinions and actions across the entire social web – Facebook, Twitter, Linkedin, and other social bookmarking sites.

  7. Klout confuses interaction with influence. They are not the same.

    It reminds me of the Albert Einstein quote: “Not everything that can be counted counts, and not everything that counts can be counted.”

  8. The Klout Score, a Way to Measure Online Influence | Online Marketing Project Saturday, January 22, 2011

    [...] has been in the public eye lately, especially after closing an $8.5 million funding round with Kleiner Perkins. Klout measures internet influence based off of Twitter, [...]

  9. Klout Gets $8.5M to Create the Page Rank of the Social Web: Tech News and Analysis « http://t.co/xl7Oa0Ho #facebook

  10. Klout gets $8.5M to Create the Page Rank Score of the Social Web http://t.co/Xn29ziF0

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