Jan 11 Bazaarvoice Inc, which helps
companies run online consumer reviews, said its purchase of
PowerReviews Inc would not cut competition, after the U.S.
Justice Department sued the company to try to force it to sell
The department challenged the acquisition and said it sought
to prevent one firm from dominating the product rating and
review platforms market, prompting a brokerage to cut its rating
on the company's stock.
The firms help companies use social media to advertise and
also try to control any damage to clients' reputations from bad
reviews. PowerReviews helped online retailers set up customer
review sections on their websites so that they could compete
"We provided the DOJ with extensive documents, data, and
information demonstrating that our acquisition of PowerReviews
was procompetitive and did not result in a lessening of
competition," Bazaarvoice said in a statement.
"We disagree with the DOJ's decision to ignore that evidence
and we will now shift our attention to a court of law where we
expect to be fully vindicated."
Bazaarvoice's 700 clients include Panasonic Corp,
Burpee, Timex, Infiniti and Macy's Inc, according to its
BMO Capital Markets downgraded the company's stock to
"market perform" from "outperform."
"After the departure of the CEO, a billings growth
deceleration, the admission of sales execution issues, and now
the announcement of a DOJ antitrust suit ... our confidence in a
recovery over the next 12 months is now too low to support a
bullish call on the stock," BMO analyst Karl Keirstead said.
Bazaarvoice made a splash when it debuted on the Nasdaq in
February 2012, opening at $16, but its shares have lost more
than half their value since. They fell 17 percent on Thursday on
news of DOJ's lawsuit and closed down at $7.49.