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Bazaarvoice Pays $151M For Rival PowerReviews

May 25, 2012


The market for eCommerce reviews has been a two horse race and now they have merged. Austin-based Bazaarvoice has bought the Bay Area’s Power Reviews for $151M.

PowerReviews has raised $37M in funding from Menlo Ventures, Draper Richards, Lehman Brothers, Tenaya Capital, Four Rivers Group, and others. Baazarvoice raised $20M but is a public company.

Founded in 2005, Baazarvoice went public in February and is up over 60% since then. The company is now valued at $860M. Bazaarvoice’s fourth quarter revenue was $31M to $31.5M, up more than 60% from last year, and better than the $28M analysts expected. Bazaarvoice also said it expects to have revenue of $137M to $139M for the year-ended April 2013, better than the consensus analysts estimate of $131M.

From our view, this deal makes a lot of sense as eCommerce companies now have now other choices for their reviews and cannot negotiate pricing. If anything Bazaarvoice seems to have gotten this on the cheap as they will earn this payment back easily with their new negotiating power.

From our perspective, Baazarvoice has been a great tech marketing company, not a technology innovator. They really just host product reviews. They are a testament to how weak eCommerce companies are at social interaction that they cannot manage this function themselves. But given high revenues in eCommerce and the combination of the these two companies, we think this is a great deal.

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