6/05/14

Consumer reviews platform PowerReviews is back

Bazaarvoice Inc. acquired PowerReviews for $168.2 million in 2012 but lost a civil lawsuit that alleged the acquisition violated antitrust laws. Now another consumer reviews platform, Viewpoints LLC, is buying PowerReviews from Bazaarvoice at a steep discount—$30 million—and will rebrand as PowerReviews.

Allison Enright , Editor

PowerReviews, the company that was the second-largest provider of consumer ratings and reviews technology to the largest e-retailers in North America before it was acquired in 2012 by its larger competitor Bazaarvoice Inc., will officially return to the market as a stand-alone company later this summer.

Viewpoints LLC, another consumer reviews platform, is paying $30 million for the PowerReviews assets, and Viewpoints will rebrand as PowerReviews. That’s a significant discount to the price Bazaarvoice paid for PowerReviews two years ago: $168.2 million. But a civil lawsuit filed by the U.S. Justice Department soon followed, alleging the acquisition eliminated the company’s only significant rival and violated antitrust laws. The acquisition gave Bazaarvoice more than 800 product ratings and reviews clients in the United States, including about 350 former PowerReviews clients, the U.S. Justice Department said in its filings as part of its lawsuit to block the acquisition. The court ruled against Bazaarvoice in January and ordered it to divest all PowerReviews assets.

Bazaarvoice, which announced in April a plan to sell the PowerReviews assets to Viewpoints, finalized the terms of the deal this week with Viewpoints. Subject to court approval, the deal is expected to close by July 31.

According to terms it worked out with the Justice Department this spring, Bazaarvoice also has to provide syndication services to the new PowerReviews for four years, while PowerReviews builds its own customer base and develops its own syndication network. Bazaarvoice’s syndication network connects manufacturers and retailers so a product review written about a manufacturer’s product on one e-commerce site, for example, can be seen on another e-commerce site selling the same product. Bazaarvoice must also allow clients who choose to switch to the new PowerReviews to do so without claiming breach of contract. Bazaarvoice also is required to waive trade-secret restrictions on any employees hired by the new PowerReviews. 

“Once the sale of PowerReviews is approved and closed, we will be able to put the antitrust litigation behind us and turn our full attention to the large market opportunity ahead of us,” says Gene Austin, CEO and president of Bazaarvoice, in a statement to investors announcing the sale to Viewpoints.

Matt Moog, currently the CEO of Viewpoints, will be CEO of the new PowerReviews. The founding chief technology officer of the previous iteration of PowerReviews, Jim Morris, will have that same role at the new one. Matt Parsons, formerly vice president of client success at PowerReviews, will be the chief customer officer of the new PowerReviews. PowerReviews will have offices in Chicago, where Viewpoints is based, and San Francisco, where PowerReviews has been headquartered since it launched in 2005.

“The PowerReviews team has spent the past decade finding new ways to leverage technology and data to engage consumers, and we are thrilled to join forces with them to reinvigorate the customer reviews market,” Moog says. “We intend to continue the company’s growth and will look to hire for key positions in both Chicago and San Francisco.” It is looking to hire for engineering, sales and marketing positions in both cities.

In 2011, the last full year before Bazaarvoice acquired PowerReviews, PowerReviews had as clients 80 of the 500 largest North American e-retailers, as ranked by sales in the 2012 Top 500 Guide. Bazaarvoice had 159. In 2013, 194 e-retailers in the 2014 edition of the Top 500 Guide used Bazaarvoice, and an additional 81 said they used PowerReviews, which was at the time owned by Bazaarvoice. Those retailers include Abt Electronics Inc. (No. 149), Brookstone Inc. (No. 203), Eastern Mountain Sports Inc. (No. 478) and RadioShack Corp. (No. 317). A single top 500 e-retailer, Sears Holdings Corp., No. 5, said it used Viewpoints for customer ratings and reviews in 2013.

Topics:

acquistion, antitrust lawsuit, Bazaarvoice, customer service, e-commerce, PowerReviews, Technology, Viewpoints

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