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Bazaarvoice Looks to Twitter, Facebook In FeedMagnet Deal

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NEW YORK (TheStreet) -- Bazaarvoice's $9 million acquisition of FeedMagnet may help the online customer review network expand its services to social media such as Instagram, Pintrest, Facebook , and Twitter . The deal also marks a new strategy for Bazaarvoice after the Department of Justice fought the company's acquisition of competitor PowerReviews.

Instead of trying to further scale in online consumer reviews that are the deciding factor behind a majority of online purchases, Bazaarvoice is looking to expand its services to user-generated content on social networks. That content, whether it's an Instagram photo, a tweet, or a Facebook post, is expected to become of increasing importance for brands and companies seeking online sales.

"When we acquired PowerReviews, we acquired another ratings and reviews provider that gave us additional clients in the small-to-midsize business marketplace," Matt Krebsbach, Bazaarvoice's director of global public relations, told TheStreet in a telephone interview. "FeedMagnet gives us a new product that we did not already have," he said.

As Krebsbach and recently-appointed Bazaarvoice CEO Gene Austin put it, there is a disconnect between what customers are communicating about a brand on social networks like Instagram and what those brands can hear.

Austin, Tx-based Bazaarvoice is the de-facto customer review portal for companies as prominent as Best Buy , Wal-Mart , Macy's and Costco , and believes it can provide insights gleaned from social networks to its customers. With FeedMagnet, Bazaarvoice CEO Austin told TheStreet he believes customers will be able identify media such as Instagram images that a company can use on its website or in marketing materials.

"It was clear to us from our customers that they wanted to do more than just our reviews," Austin said. "The FeedMagnet decision was really a make or buy proposition," he added. Like Bazaarvoice, FeedMagnet is headquartered in Austin, Tx. and was recommended by some of the company's clients, CEO Austin said. 

The deal comes at a turning point for Bazaarvoice.

DoJ Lawsuit, Falling Shares

Bazaarvoice may soon move beyond its $168 million acquisition of PowerReviews, which put the company in the DoJ's crosshairs. In early April, Bazaarvoice said in entered into a letter of intent with Viewpoints to divest its PowerReviews business, subject to court approval and an agreement on closing conditions.

Were that deal to move forward, it could free Bazaarvoice from a troubled horizontal acquisition. In early 2013, the DoJ accused Bazaarvoice of eliminating its only major competitor in PowerReviews, and called the deal "unlawful." The DoJ also said Bazaarvoice took customers away from PowerReviews without investing in the business it acquired.

As a remedy, Bazaarvoice is now looking to simply sell PowerReviews, however, it is unclear what additional steps the company may have to take. Austin, who took over as Bazaarvoice's CEO in February from Stephen Collins, said the company has had a bit of a "tumultuous' time as a public company.