Commitments and Contingencies

6 Months Ended

Oct. 31, 2012

Commitments and Contingencies [Abstract]

Commitments and Contingencies

9. Commitments and Contingencies

The Company reviews the status of each matter and record a provision for a liability when it is considered both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed quarterly and adjusted as additional information becomes available. If either or both of the criteria are not met, the Company assesses whether there is at least a reasonable possibility that a loss, or additional losses, may be incurred. If there is a reasonable possibility that a loss may be incurred, the Company discloses the estimate of the amount of loss or range of losses, discloses that the amount is immaterial (if applicable), or discloses that an estimate of loss cannot be made.

After the completion of the Company’s acquisition of PowerReviews, the Department of Justice, Antitrust Division, notified the Company that it has opened an investigation to determine whether the acquisition violated Section 7 of the Clayton Act, 15 U.S.C. Section 18. Due to the early stages of the investigation, it is not possible to reliably predict the outcome of the investigation. Therefore, the Company cannot currently make a reasonable estimate of the possible loss or range of loss as a result of the investigation.

At October 31, 2012, the Company was in the process of assessing the sales tax status of the Bazaarvoice enterprise service offering with sales tax agencies in the states in which it operates. Based on the limited information received from certain of these states, the company cannot estimate with certainty which of its service offerings and features these states may determine to be subject to state sales tax. The Company preliminarily estimates that its liability, net of amounts to be recovered from customers, to range between $0.7 million and $2.0 million. The Company has accrued a liability of $1.1 million, representing the best estimate of the amount within the range that is probable will be incurred to settle these obligations. The estimated range includes an action plan for recovering the amounts due from its customers. If it is determined that the portion of the Company’s product offering subject to state sales tax is greater than the accrual at October 31, 2012, then the actual liability incurred will likely approach the higher end of the preliminarily estimated range.