Should you care how high your Klout score is?

Klout, the San Francisco-based startup that is trying to build a Page Rank of online influence, has been taking a lot of fire from critics after making some changes to the way it calculates that influence — an algorithm update that resulted in lower Klout scores for many users. This led to howls of outrage on the company’s blog, as well as a number of posts arguing that Klout scores are effectively meaningless, since no one really knows how the score is calculated. While these criticisms may be well-founded, however, there is no question that measuring online influence is a huge potential market, and Klout is far from the only one doing it; Google(s goog), Twitter and Facebook clearly have their eyes on that prize as well.

In the official Klout blog post about the changes, CEO Joe Fernandez — who started the company in 2007 in New York, while he was bed-ridden after an operation on his jaw — said the service is always tweaking its algorithms to try to make them reflect actual online influence better, and that this latest change was designed to improve the “stability and accuracy of our scores.” He said the update was also aimed at making Klout’s sub-scores, which measure factors such as “reach” and “amplification,” more clear and easier to understand. For many of those commenting on the post, however, all that mattered was that their scores had dropped — in some cases by a lot.

Klout scores are being used by employers for hiring

One of the most popular comments said that Klout was used by some companies for job searches, as well as employee performance reviews and other similar purposes, and that the company’s changes could affect people’s livelihood:

By changing the entire scoring system for the basic Klout score, you have damaged many people’s employment viability and impacted their earning potential – particularly in the nascent field of Social Media roles.

That wasn’t the only negative response — just one of the more coherent. On Wednesday evening, Twitter was filled with angry posts about the changes as well, along with sarcastic messages from some about how their pets had higher Klout scores than their employers (at one point a hashtag called #OccupyKlout even started up, and retweeted some of the most critical posts). Klout CEO Fernandez, who was at a conference in Ireland, responded to many of the criticisms by saying the update was necessary, and that most of the scores for people in the company — including him — also declined as a result of the update. Later in the evening, he added:

Others, however, seemed to agree with a post at TechCrunch, which argued that “nobody gives a damn about your Klout score” and compared it to a horoscope. Many pointed out that it’s impossible to tell what the scores are based on because Klout keeps its algorithms secret — which the company says it does for competitive reasons, since other services like PeerIndex and Kred are trying to do something similar (Fernandez said that Klout’s data set is “orders of magnitude larger” than any of his competitors). And some critics argued that the only people who care are self-appointed “social-media mavens” who make their living by trying to convince people that Twitter matters.

Klout is “an indispensable part of the ecosystem,” Twitter says

While it may be true that those affected by Klout scores are primarily social-media consultants, there’s no question that the goal of measuring influence online is one that some major players also have their sights on. Ryan Sarver, the head of platform for Twitter, spent part of Wednesday night arguing with a number of people about the value of what Klout is doing, and said that “regardless of how you feel about Klout, it has become an indispensable part of the ecosystem,” and that “online reputation is going to be enormous.”

Twitter is definitely interested in this area; founder and former CEO Evan Williams has said that the network has its own internal “reputation rank” system, although it has not revealed anything about it so far or made it available to partners. If Klout can base its rankings on Twitter activity (it also looks at Facebook, Google+ and a number of other networks), there’s no question that Twitter itself could do the same fairly easily. And Google is aiming at a similar goal with its Google+ network, which it plans to incorporate into everything the company touches; the way users add +1 to search results and other behavior seems clearly designed to come up with a social-search ranking system.

The days when people get compensated based on their Klout score or some other ranking of social activity — as Salesforce CEO (s crm) Marc Benioff discussed at a GigaOM conference last year — may be far off, but there is a multibillion-dollar advertising and marketing machine that is trying to figure out how to measure online influence, and Klout is a major player in that race. Whether it can become the default measurement platform remains to be seen, but this isn’t a race that is going to end any time soon. In the meantime, embedded below is an amusing video that Xtranormal did in which someone tries to describe why they want a higher Klout score:

Post and thumbnail photos courtesy of Flickr users Danny Cain and Refracted Moments