Jan 11 Bazaarvoice Inc, which helps
companies run online consumer reviews, said its purchase of
PowerReviews Inc would not reduce competition, after the U.S.
Justice Department sued the company to try to force it to sell
Shares of the company fell 12 percent to a life-low in
Friday morning trade, after losing 17 percent of their value on
The department challenged the acquisition and said on
Thursday it sought to prevent one firm from dominating the
product rating and review platforms market, prompting BMO
Capital Markets to cut its rating on the company's stock.
Lazard Capital said the lawsuit will be an overhang on the
stock and legal expenses could increase operating expenses. The
brokerage maintained its "neutral" rating on the 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
The acquisition has allowed Bazaarvoice to extend its
network reach, syndicate more content to its customers, and gain
a presence at the low end of the market with the PowerReviews
Express product, Lazard said.
"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, excluding Friday's losses.
The stock fell to $6.62 on the Nasdaq in Friday morning