Some think your Klout score ranks as the real social deal, but investors have reason to scale back their hopes.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
NEW YORK (TheStreet) -- There's an old saying that numbers tell the story. The thing is, sometimes you're not sure what that story exactly is.
Hopefully you have better things to do than keep up on the latest in social media, so you may not have heard of San Francisco-based Klout. This online ranking service attempts to be sort of the credit score bureau of the social Web. Klout gathers all a person's social media personas -- you know, Twitter feeds, Facebook (:FB) accounts, LinkedIn (:LNKD) networks and Pinterest pins -- and assesses how socially reputable that persona is. Though Klout is strictly mum about how it does its ranking, it assigns a numeric value, from 1 to 100, to quantify what they call your social influence. I remember Justin Bieber being the only person ever to hit 100; Barack pulls a 99; my editor, who has a simple, private Facebook account, gets a 10.
In this numbers-addled age, one's Klout score has ranked as the real social deal.
A LinkedIn job post for a community manager position at Salesforce (:CRM), the online business applications managing company, said it expects to see a Klout score of at least 35.
Forbes reported that consumers with higher Klout scores get better services and even discounts from certain companies.
Advertisers too have offered promotional perks to the socially influential. Klout says General Motors (:GM), American Express (:AXP) and Walt Disney (:DIS) lined up over the past two years to offer discounts and goodies.
Facebook recently started supporting the tool with an app. And all this hype finally metastasized into an investor story when Klout said software giant Microsoft (:MSFT) made an undisclosed strategic investment in an effort to give its struggling search engine Bing some social-media suction.
And bing, don't the numbers swirling around Klout suddenly start telling a far darker story.
Klout evaporates in an instant
To get a better feel for the business value of Klout, I started tinkering with the service. My first-blush Klout score was in line with most working journalists, about a 60. That was based exclusively on my targeted business Twitter account, @Blumsday, which has 6,500 or so followers, and a LinkedIn network of about 950 people.
But when I added my personal Facebook account, with about 470 friends, guess what happened? My company's score dropped. And not by a little, but by almost 25%, down to 45. Even more bizarre: It stayed at 45 even after I disconnected my Facebook account from Klout.
And that's when I saw the wheels fly off the Klout numeric bus.
Think about it. Never mind what mathematical gerrymandering is required to have a cumulative calculation collapse by 25% when I add 5% more users; how can my score not go back up to its original level when I unlink my Facebook account?
When I contacted the company, a very nice representative, Lynn Fox, told me, "What you described sounded odd, because adding an account typically does not lead to a score drop ... It appears that there was a Klout glitch." And she said they would restore my account to its previous level.
But when I followed up with the deeper questions, like what kind of a model can make such a dubious numeric jump, Fox declined to respond to two emails.
So I checked in with experts who manage the type of data Klout deals with and they agreed odd results can be expected.
"I am not surprised that there are flaws in this algo," Michael Driscoll explained to me over the phone. Driscoll is the co-founder of Metamarkets, a San Francisco-based big data management and analysis firm. He also is co-chairman of the Bay Area users group for R, a cutting-edge stats computer language.
Driscoll, who was clear that he has no direct knowledge of Klout but felt comfortable speaking as an expert, said there are very real practical limits such companies will face. This operation has to pull in data streams from dozens of social media platforms and somehow render all that into a meaningful two-digit number (three if you're Bieber, one if you're dead) -- a monstrously complex job for any company, even one with the backing of Microsoft.
It's not just my experience that backs up Driscoll's skepticism. Look around.
There is Hollis Tibbets, an independent software marketing and technology consultant who wrote a hilarious post about how he created a fake social-media persona with minimal Facebook and Twitter presences yet still earned a Klout score of 37 -- enough to get that Salesforce job posted to LinkedIn. There is a robot called Curiosity Rover -- you know, the space thingie driving around on Mars -- that has a score of 84, just 6 points less than Mitt Romney's 91 and double the 49 assigned to the misspelled "Mitt Romeny," who also claims to be a robot.
A 49, incidentally, that is equal to an another account named Warren Buffett who has to be one of the most influential people on the planet.
But wait, there is another Klout profile, again for Warren Buffett, that shows a score of 77. Of course, there is no way to confirm any of these scores, so who knows what's actually happening here.
Which is, of course, the point.
Even more interesting, even though the company does not comment officially on its calculations, if you listen carefully to its public statements you'll hear execs quietly acknowledge that Klout is very much a work in progress. Take a look at this fascinating video of CEO Joe Fernandez as an interviewer asks him what a 35 score actually means.
"Is there a best practice?" Fernandez said to TechCrunch's Drew Olanoff, referring to things the company could do to better define how a score is derived. "That is probably something we should be working on."
Not enough investor clout
All this leads to a rank investor ranking for Klout. What makes Klout not just another dubious social media parlor trick is, of course, its deal with Microsoft, but to these tired eyes Redmond is yet again dabbling in a dangerous digital distraction just as it begins what is the most critical product launch in a decade -- the rollout to Windows 8.
If Klout could explain how it does its thing, that would be one thing. But considering the company's reticence, the dubious results and what lies ahead for Microsoft, my take from testing Klout is that it simply should not rank with investors.