Finance chief Stephen Collins takes over the top spot at Bazaarvoice.
Bazaarvoice, which provides customer reviews and other content for online retailers, has named a new CEO steeped in financial expertise as it continues to deal with losses in net income and buys another company—paying about $33 million for Longboard Media Inc., which serves up ads on retail e-commerce sites.
The company promoted to the top job Stephen Collins, who has been chief financial officer at Bazaarvoice since September 2010. Collins took on the added title of chief innovation officer in January of this year. Before joining Bazaarvoice, Collins was CEO of Juris Inc., a provider of business software for law firms that is now part of LexisNexis Group Inc. Prior to Juris, he was chief financial officer and chief information officer of online ad network DoubleClick Inc., now a part of Google Inc. Earlier, Collins held several finance positions at Colgate-Palmolive Co. and was a financial auditor with accounting and consulting firm PricewaterhouseCoopers.
Brett Hurt, the company’s co-founder and CEO since its launch in 2005, will remain on the Bazaarvoice board of directors as vice chairman.
“In addition to his oversight of all financial and technology operations, Stephen has been involved in all aspects of the company and an invaluable member of the executive team since he joined Bazaarvoice,” Hurt says. “I believe that it is the right time to transition the management of the company, and I look forward to continuing to support the company in my new role as vice chairman."
Among Collins’ first responsibilities will be working with Longboard Media to develop new ways for online retailers to engage consumers. Longboard provides a media management network that lets online retailers earn revenue from ads placed on their e-commerce sites by consumer brand manufacturers and other advertisers.
Sucharita Mulpuru, vice president and principal analyst for e-business at Forrester Research Inc., says she’s surprised that Longboard agreed to be acquired rather than seek venture capital to help it grow in what appears to be a promising market for placing ads on e-commerce sites. She notes that the market has been made more credible by Longboard competitor HookLogic and the fact that Amazon.com Inc. is also growing its own sales of ads on Amazon.com.
But for Bazaarvoice, she adds, Longboard represents another suite of on-site services to offer clients. “This gives Bazaarvoice another interesting growth opportunity, which should be served well by their large and aggressive sales force,” Mulpuru says.
Bazaarvoice says it sees the Longboard ad content as an extension of the range of web content Bazaarvoice already provides in customer ratings and reviews and in recently launched products like Connections, a social Q&A feature that lets shoppers post questions about products online and receive answers from other consumers as well as representatives of the retailer and the product’s manufacturer. “Longboard Media facilitates our ability to continue developing network solutions to leverage our consumer audience reach, content and data to create incremental value for our clients,” Collins says. Bazaarvoice hasn’t offered more details on how it will work with Longboard to develop new content offerings.
Bazaarvoice is paying Longboard’s stockholders about $26.9 million in cash and about 500,000 shares of Bazaarvoice stock, for a total deal valued at about $32.7 million. Bazaarvoice’s stock, which is traded on the Nasdaq stock exchange, was trading at about $11.13 at mid-day today, down 11% from yesterday’s closing price of $12.54 and down 47% from a 52-week high of $21.10.
The acquisition of Longboard follows Bazaarvoice’s $151.9 million purchase in June of PowerReviews, until then its major rival in consumer reviews technology. And though Bazaarvoice says such acquisition activity has contributed largely to its ongoing losses in net income, it expects to continue making investments. “We anticipate making significant investments in growth and initiatives designed to improve our operating efficiency for the foreseeable future, which may impact our ability to generate positive cash flow from operating activities in the near-term,” the company said in a Securities and Exchange Commission filing for its first fiscal quarter ended July 31, 2012.
For the first quarter, Bazaarvoice reported:
● Revenue of $35.66 million, up 62% from $22.01 million a year earlier
● A net loss of $18.54 million, compared with a year-earlier net loss of $5.43 million