Why Klout’s Clout is Growing

Right now, the online “influence” measurement startup Klout is enjoying the kind of attention that many startups can only dream about.

People with high “influence” ratings–largely achieved by attracting other “influential” people to follow them on Twitter–can’t stop talking about Klout (mostly on Twitter). Brands hoping to stay relevant to younger generations seem equally obsessed with how to capitalize the company’s ability to measure another’s capacity to be noticed.

VCs have taken notice, too. Just last month, Klout took $8.5 million in financing led by none other than Kleiner Perkins Caufield & Byers. The funding brought financing for the two-year-old San Francisco-based company to $10 million.

One measure of Klout’s influence is the degree to which it has become a lightning rod for controversy. For example, it has attracted widespread complaints that frequent tweeting translates to a high Klout rating. (While Klout’s algorithm ranks everyone who uses Twitter, LinkedIn, or Facebook on a scale of 1 to 100, the common knock against it is that truly influential people don’t necessarily tweet all day, if at all.)

More recently, Klout has also been lambasted for assigning high Klout ratings to spam bots and for awarding ratings to individuals without factoring in sentiment first. For example, when designer Kenneth Cole used the recent Egyptian protests to promote his spring line, his tweet–which was universally derided–roughly doubled his Klout score.

Founder and CEO Joe Fernandez says he’s taken aback by all the attention, and that Klout is still very much a work in progress. He readily concedes, for example, that “there are spam accounts on Twitter that end up with high Klout scores.” He also points out that both Twitter and Google are plagued by spammers, despite having more resources.

Fernandez is open about Klout’s still-ambiguous business plan. Right now, it hinges on getting paid by brands like Virgin and Disney to send out emails with free tickets and other perks to the “less than a million” people who’ve registered with Klout, and who rate highly enough to be considered influential. “We’re just seeing what can happen if we put people in the right situation, and we report that back to the brand,” says Fernandez.

Fernandez doesn’t shrink from Klout’s heavy reliance on Twitter, either, even while Twitter could conceivably kill off Klout if it doesn’t decide to acquire it someday. “The feeling, from my perspective at least, is that this is a little like Zynga, riding on the back of Facebook,” Fernandez says. “The truth is that people can only have a high Klout score if they’re really engaged with Twitter, so right now, Twitter thinks we’re great.”

Whether that remains the case down the road is just one more question that seems to concern Klout very little. In an age where brands are willing to spend almost anything to reach social consumers, who can blame it? Klout is mining a vein of ad dollars so deep, one senses it could do everything wrong and still end up as a viable acquisition candidate.

For more on Klout, check out Connie’s Q&A with Klout CEO Joe Fernandez here.