(Adds background on antitrust challenge to deal, share price)
WASHINGTON, April 24 (Reuters) - Software company Bazaarvoice Inc has agreed to undo a 2012 merger with a rival that had been challenged by the U.S. government, the Justice Department said on Thursday.
Austin, Texas-based Bazaarvoice, which helps companies manage online consumer reviews, will sell the PowerReviews assets it purchased two years ago to a company called Viewpoints, Bazaarvoice said in a separate release.
The decision came after Bazaarvoice lost a fight with the Justice Department in January.
A federal court ruled the deal was illegal under antitrust law because it could lead to one firm dominating the online product rating and review market.
Bazaarvoice had purchased PowerReviews for $168.2 million. Both companies help firms use social media to advertise and also try to control any damage to clients' reputations from bad reviews.
Bazaarvoice shares closed at $6.80, down 1.7 percent. (Reporting by Diane Bartz; Editing by Peter Cooney)