Lithium and Klout: Does it make sense?

What does Klout bring to the social enterprise software table? That's a good question that only Lithium seems to know.

Lithium, a social customer relationship management software company, will reportedly acquire Klout, which measures online popularity and influence.

According to re/code Lithium will buy Klout for something north of $100 million. Lithium has raised $50 million in venture funding and Klout has raised $40 million despite the fact the service is often derided and the company lacks anything that resembles a business model.

lithium

In enterprise software circles, the deal is drawing a few snickers. First, Lithium, which apparently will go public at some point, has been acquiring companies to fill in gaps. The company acquired Social Dynamx in 2012 and Scout Labs in 2010.

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The problem for Lithium is that it was early to the social CRM game, but failed to capitalize. Now Salesforce, Oracle, SAP and a bevy of others have social listening and customer experience tools built into their wares. Meanwhile, rivals such as Jive are already public and well funded. Lithium's best option would have been acquired by a larger player like Salesforce, which bought Radian6.

It's also telling that SAP Ventures was an early Lithium investor, but didn't find enough worth acquiring. 

From a pure software standpoint, it's a bit fuzzy what Klout brings to Lithium. An influence score could be helpful for social listening, but the hubbub around Klout and its usefulness could actually be a handicap in the enterprise.

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