10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 31, 2013

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission file number 001-35433

BAZAARVOICE, INC.

(Exact name of registrant as specified in its charter)

State of Delaware	20-2908277
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
3900 N. Capital of Texas Highway, Suite 300 Austin, Texas	78746-3211
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (512) 551-6000

Not Applicable

(Former name, former address, and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The number of shares of the registrant’s common stock outstanding as of February 28, 2013 was 72,787,229.

Bazaarvoice, Inc.

Table of Contents

		Page
Part I.	Financial Information
Item 1.	Condensed Consolidated Financial Statements:
	Unaudited Condensed Consolidated Balance Sheets as of January 31, 2013 and April 30, 2012		3
	Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended January  31, 2013 and 2012		4
	Unaudited Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended January 31, 2013 and 2012		5
	Unaudited Condensed Consolidated Statement of Changes in Stockholders’ Equity for the nine months ended January 31, 2013		6
	Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended January  31, 2013 and 2012		7
	Notes to Unaudited Condensed Consolidated Financial Statements		8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		34
Item 4.	Controls and Procedures		34
Part II.	Other Information		35
Item 1.	Legal Proceedings		35
Item 1A.	Risk Factors		35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		52
Item 6.	Exhibits		53
Signature			54

Bazaarvoice, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except shares and per share data)

(unaudited)

	January 31, 2013			April 30, 2012
Assets
Current assets:
Cash and cash equivalents	$	23,845		$	74,367
Restricted cash		604			500
Short-term investments		81,646			50,834
Accounts receivable, net of allowance for doubtful accounts of $1,564 and $788 as of January 31, 2013, and April 30, 2012, respectively		30,310			17,977
Prepaid expenses and other current assets		4,624			3,873
Total current assets		141,029			147,551
Property, equipment and capitalized internal-use software development costs, net		13,431			8,868
Goodwill		141,833			—
Acquired intangible assets, net		53,465			—
Other non-current assets		190			448
Total assets	$	349,948		$	156,867
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	6,189		$	2,523
Accrued expenses and other current liabilities		23,289			12,725
Deferred revenue		50,755			42,152
Total current liabilities		80,233			57,400
Deferred revenue less current portion		2,162			3,434
Deferred tax liability, long-term		1,393			31
Other liabilities, long-term		6,836			2,404
Total liabilities		90,624			63,269
Commitments and contingencies (Note 11)
Stockholders’ equity:
Common stock – $0.0001 par value; 150,000,000 shares authorized, 72,948,155 shares issued and 72,698,155 shares outstanding as of January 31, 2013; 150,000,000 shares authorized, 58,779,937 shares issued and 58,529,937 shares outstanding as of April 30, 2012		7			6
Treasury stock, at cost – 250,000 shares as of January 31, 2013 and April 30, 2012		—			—
Additional paid-in capital		365,115			158,769
Accumulated other comprehensive loss		(33	)		(20	)
Accumulated deficit		(105,765	)		(65,157	)
Total stockholders’ equity		259,324			93,598
Total liabilities and stockholders’ equity	$	349,948		$	156,867

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

Bazaarvoice, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except net loss per share data)

(unaudited)

	Three Months Ended January 31,						Nine Months Ended January 31,
	2013			2012			2013			2012
Revenue	$	42,678		$	27,602		$	116,966		$	74,705
Cost of revenue		14,217			9,514			40,949			26,116
Gross profit		28,461			18,088			76,017			48,589
Operating expenses:
Sales and marketing		20,710			12,152			53,882			35,469
Research and development		8,914			6,059			24,356			13,978
General and administrative		8,783			5,934			32,463			15,848
Acquisition-related and other		2,021			—			4,771			—
Amortization of acquired intangible assets		1,165			—			2,543			—
Total operating expenses		41,593			24,145			118,015			65,295
Operating loss		(13,132	)		(6,057	)		(41,998	)		(16,706	)
Other income (expense), net
Interest income		61			4			110			17
Other income (expense)		(49	)		(341	)		(451	)		(805	)
Total other income (expense), net		12			(337	)		(341	)		(788	)
Loss before income taxes		(13,120	)		(6,394	)		(42,339	)		(17,494	)
Income tax expense (benefit)		(2,293	)		181			(1,731	)		468
Net loss	$	(10,827	)	$	(6,575	)	$	(40,608	)	$	(17,962	)
Accretion of redeemable convertible preferred stock		—			(10	)		—			(35	)
Net loss applicable to common stockholders	$	(10,827	)	$	(6,585	)	$	(40,608	)	$	(17,997	)
Net loss per share applicable to common stockholders:
Basic and diluted	$	(0.15	)	$	(0.34	)	$	(0.60	)	$	(0.93	)
Basic and diluted weighted average number of shares outstanding		71,940			19,613			68,115			19,284

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

Bazaarvoice, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

(unaudited)

	Three Months  Ended January 31,						Nine Months Ended January  31,
	2013			2012			2013			2012
Net loss	$	(10,827	)	$	(6,575	)	$	(40,608	)	$	(17,962	)
Other comprehensive gain (loss), net of tax:
Foreign currency translation adjustment		(21	)		(44	)		(30	)		(80	)
Unrealized gain (loss) on investments		(6	)		—			17			—
Total other comprehensive loss, net of tax		(27	)		(44	)		(13	)		(80	)
Comprehensive loss	$	(10,854	)	$	(6,619	)	$	(40,621	)	$	(18,042	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

Bazaarvoice, Inc.

Condensed Consolidated Statement of Changes in Stockholders’ Equity

(in thousands)

(unaudited)

	Common Stock				Treasury Stock
(in thousands)	Number of Shares		Amount		Number of Shares		Amount		Additional Paid-in Capital		Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Stockholders’ Equity
Balance at April 30, 2012		58,780	$	6		250	$	—	$	158,769	$	(20	)	$	(65,157	)	$	93,598
Issuance of stock to acquire PowerReviews		6,381		1		—		—		119,694		—			—			119,695
Issuance of stock to acquire Longboard Media		460		—		—		—		5,802		—			—			5,802
Issuance of common stock, net of issuance costs		3,625		—		—		—		51,943		—			—			51,943
Excess tax benefit related to stock-based compensation		—		—		—		—		365		—			—			365
Stock-based expense		—								19,072		—			—			19,072
Issuance of restricted stock awards		50		—		—		—		—		—			—			—
Exercise of stock options and vested restricted stock units		3,652		—		—		—		9,470		—			—			9,470
Change in foreign currency translation adjustment		—		—		—		—		—		(30	)		—			(30	)
Change in unrealized loss on investments		—		—		—		—		—		17			—			17
Net loss		—		—		—		—		—		—			(40,608	)		(40,608	)
Balance at January 31, 2013		72,948	$	7		250	$	—	$	365,115	$	(33	)	$	(105,765	)	$	259,324

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6

Bazaarvoice, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	Nine Months Ended January 31,
	2013			2012
Operating activities
Net loss	$	(40,608	)	$	(17,962	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization expense		7,473			2,247
Stock-based expense		19,072			5,758
Bad debt expense		1,643			925
Excess tax benefit related to stock-based compensation		(365	)		—
Changes in operating assets and liabilities:
Accounts receivable		(10,581	)		(8,394	)
Prepaid expenses and other current assets		257			529
Other non-current assets		1,161			(361	)
Accounts payable		521			2,005
Accrued expenses and other current liabilities		7,027			5,125
Deferred revenue		4,647			9,971
Other liabilities, long-term		(2,952	)		1
Net cash used in operating activities		(12,705	)		(156	)
Investing activities
Acquisitions, net of cash acquired, and purchase of intangible asset		(60,750	)		—
Purchases of property, equipment and capitalized internal-use software development costs		(8,004	)		(3,806	)
Purchases of short-term investments		(74,578	)		—
Proceeds from sale of short-term investments		43,783			—
Increase in restricted cash		—			(250	)
Net cash used in investing activities		(99,549	)		(4,056	)
Financing activities
Payments of initial stock offering costs		—			(938	)
Proceeds received from follow-on stock offering, net of costs		51,943			—
Proceeds from exercise of stock options		9,470			2,478
Excess tax benefit related to stock-based compensation		365			—
Net cash provided by financing activities		61,778			1,540
Effect of exchange rate fluctuations on cash and cash equivalents		(46	)		(73	)
Net decrease in cash and cash equivalents		(50,522	)		(2,745	)
Cash and cash equivalents at beginning of period		74,367			15,050
Cash and cash equivalents at end of period	$	23,845		$	12,305
Supplemental disclosure of other cash flow information:
Cash paid for income taxes	$	236		$	105
Supplemental disclosure of non-cash investing and financing activities:
Accretion of redeemable convertible preferred stock	$	—		$	35
Accrued stock offering costs		—			1,600
Issuance of stock for acquisition		125,497			—

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

7

Bazaarvoice, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

1. Organization and Nature of Operations

Bazaarvoice, Inc. (“Bazaarvoice” or the “Company”) is a leading provider of social commerce solutions that help its clients capture, display and analyze online word of mouth, including consumer-generated ratings and reviews, questions and answers, stories, recommendations, photographs, videos and other content about its clients’ brands, products or services. Bazaarvoice, which literally means “voice of the marketplace,” was founded on the premise that online word of mouth is critical to consumers and businesses because of its influence on purchasing decisions, both online and offline. Bazaarvoice helps clients to leverage social data derived from online word of mouth content to increase sales, acquire new customers, improve marketing effectiveness, enhance consumer engagement across channels, increase success of new product launches, improve existing products and services, effectively scale customer support, decrease product returns and enable retailers to launch and manage on-site advertising solutions and site monetization strategies.

2. Summary of Significant Accounting Policies

Basis of Presentation

The Company’s significant accounting policies and recent accounting pronouncements are described in Note 2 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2012, filed on June 11, 2012. The unaudited condensed consolidated financial statements and notes included herein should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2012, filed on June 11, 2012.

Unaudited Interim Financial Information

The accompanying unaudited condensed consolidated financial statements and notes have been prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“U.S. GAAP”), as contained in the Financial Accounting Standards Board (“FASB”), Accounting Standards Codification for interim financial information and Article 10 of Regulation S-X issued by the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not include all the information and footnotes required by U.S. GAAP for annual fiscal reporting periods. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of the results of operations, financial position, changes in stockholders’ equity and cash flows. The results of operations for the three and nine months ended January 31, 2013 are not necessarily indicative of results that may be expected for the year ending April 30, 2013 or any other period.

Fair Value of Financial Instruments

The Company applies the authoritative guidance on fair value measurements for financial assets and liabilities and non-financial assets and liabilities, such as goodwill, indefinite-lived intangible assets and property plant and equipment that are measured at fair value on a non-recurring basis. The guidance defines fair value, thereby eliminating inconsistencies in guidance found in various prior accounting pronouncements, and increases disclosures surrounding fair value calculations. The guidance establishes a three-tiered fair value hierarchy that prioritizes inputs to valuation techniques used in fair value calculations. The three levels of inputs are defined as follows:

Level 1: Unadjusted quoted prices for identical assets or liabilities in active markets accessible by the Company.

Level 2: Inputs that are observable in the marketplace other than those inputs classified as Level 1.

Level 3: Inputs that are unobservable in the marketplace and significant to the valuation.

Derivative Financial Instruments

As a result of the Company’s international operations, it is exposed to various market risks that may affect its consolidated results of operations, cash flows and financial position. These market risks include, but are not limited to, fluctuations in currency exchange rates. The Company’s primary foreign currency exposures are in Euros and British Pound Sterling. The Company faces exposure to adverse movements in currency exchange rates as the financial results of certain of its operations are translated from local currency into U.S. dollars upon consolidation. Additionally, foreign exchange rate fluctuations on transactions denominated in currencies other than the functional currency result in gains and losses that are reflected in income.

The Company may enter into derivative instruments to hedge certain net exposures of non-U.S. dollar-denominated assets and liabilities, even though it does not elect to apply hedge accounting or hedge accounting does not apply. Gains and losses resulting from a change in fair value of these derivatives are reflected in income in the period in which the change occurs and are recognized on the consolidated statement of operations in other income (expense). Cash flows from these contracts are classified within net cash used in operating activities on the consolidated statements of cash flows.

The Company does not use financial instruments for trading or speculative purposes. The Company recognizes all derivative instruments on the balance sheet at fair value, and its derivative instruments are generally short-term in duration. Derivative contracts were not material as of January 31, 2013. The Company is exposed to the risk that counterparties to derivative contracts may fail to meet their contractual obligations.

8

There have been no other significant changes or updates to the Company’s significant accounting policies disclosed in its Annual report on Form 10-K for the fiscal year ended April 30, 2012, filed on June 11, 2012.

Recently Adopted Accounting Pronouncements

Goodwill

In September 2011, the FASB issued ASU 2011-08, “Intangibles – Goodwill and Other: Testing Goodwill for Impairment,” which simplifies the periodic testing of goodwill for impairment. This guidance will allow companies to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test required under current accounting standards. This guidance will be effective for the Company’s annual goodwill impairment test performed in the fiscal year ending April 30, 2013 and is not expected to have a material impact on the Company’s consolidated financial statements.

Comprehensive Income

In June 2011, the FASB issued a standard to require an entity to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The standard eliminates the option to present the components of other comprehensive income as part of the statement of equity. The updated accounting guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 on a retrospective basis. Early application is permitted. The Company adopted the updated guidance in the first quarter of the fiscal year ending April 30, 2013.

In February 2013, the FASB issued an update to improve the reporting of reclassifications out of accumulated other comprehensive income (“AOCI”). Companies are also required to present reclassifications by component when reporting changes in AOCI balances. The updated accounting guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2012 on a prospective basis. This guidance will be effective for the fiscal year ending April 30, 2014 and is not expected to have a material impact on the Company’s consolidated financial statements.

3. Fair Value of Financial Assets and Liabilities

The following table summarizes the Company’s cash and cash equivalents as of January 31, 2013 and April 30, 2012 (in thousands):

	January 31, 2013		April 30, 2012
Demand deposit accounts	$	14,845	$	45,361
Money market funds		3		288
U.S. Treasury securities		8,997		7,499
Corporate bonds		—		21,219
Total cash and cash equivalents	$	23,845	$	74,367

The following table summarizes the Company’s short-term investments as of January 31, 2013 (in thousands):

	Cost		Gross Unrealized Losses			Fair Value
Available-for-sale securities:
Certificates of deposit	$	11,596	$	(10	)	$	11,586
U.S. Treasury securities		70,080		(20	)		70,060
Total short-term investments	$	81,676	$	(30	)	$	81,646

9

The following table summarizes the Company’s short-term investments as of April 30, 2012 (in thousands):

	Cost		Gross Unrealized Losses			Fair Value
Available-for-sale securities:
Certificates of deposit	$	4,510	$	(14	)	$	4,496
U.S. Treasury securities		28,126		(28	)		28,098
Corporate bonds		18,245		(5	)		18,240
Total short-term investments	$	50,881	$	(47	)	$	50,834

All short-term investments had original maturity dates of less than 12 months at January 31, 2013 and April 30, 2012.

The following table summarizes the fair value of the Company’s financial assets and liabilities that were measured on a recurring basis as of January 31, 2013 and April 30, 2012 (in thousands):

	Fair Value Measurements at January 31, 2013								Fair Value Measurements at April 30, 2012
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	3	$	—	$	—	$	3	$	288	$	—	$	—	$	288
U.S. Treasury securities		8,997		—		—		8,997		7,499		—		—		7,499
Corporate bonds		—		—		—		—		—		21,219		—		21,219
Total cash equivalents		9,000		—		—		9,000		7,787		21,219		—		29,006
Restricted cash		604		—		—		604		500		—		—		500
Short-term investments:
Certificates of deposit		—		11,586		—		11,586		—		4,496		—		4,496
Corporate bonds		—		—		—		—		—		18,239		—		18,239
U.S. Treasury securities		70,060		—		—		70,060		28,099		—		—		28,099
Total short-term investments		70,060		11,586		—		81,646		28,099		22,735		—		50,834
Total assets	$	79,664	$	11,586	$	—	$	91,250	$	36,386	$	43,954	$	—	$	80,340
Liabilities:
Contingent consideration (see Note 4)	$	—	$	—	$	4,270	$	4,270	$	—	$	—	$	—	$	—
Total liabilities	$	—	$	—	$	4,270	$	4,270	$	—	$	—	$	—	$	—

The Company measures certain assets, including property and equipment, goodwill and intangible assets, at fair value on a non-recurring basis. These assets are recognized at fair value when they are deemed to be other-than-temporarily impaired.

The Company previously classified all of its cash equivalents, restricted cash and short-term investments using Level 1 inputs. The Company has determined that the pricing methods for certain of these investments use significant other observable inputs. Accordingly, such investments held in prior periods have been presented as Level 2. The reclassification had no impact on the fair value of investments in any of the periods presented.

4. Business Combinations

PowerReviews

On June 12, 2012, the Company acquired PowerReviews, Inc. (“PowerReviews”) for $31.1 million in cash and 6.4 million shares of the Company’s common stock. In connection with the acquisition, the Company assumed the PowerReviews option plan. After conversion, the PowerReviews options were equivalent to vested and unvested options to purchase 1.7 million shares of the Company’s common stock.

PowerReviews solutions are offered through two platforms, an enterprise platform that is similar to the Company’s current Conversations platform and an Express platform that provides certain ratings and reviews solutions as a turn-key offering. The Company accounted for the PowerReviews acquisition using the acquisition method of accounting.

The Company preliminarily allocated the purchase price to the assets acquired, including intangible assets, and liabilities assumed based on estimated fair values at the date of the acquisition. The Company estimated the value of tangible assets and liabilities based on purchase price and future intended use. The Company derived the value of intangible assets from the present value of estimated future benefits from the various intangible assets acquired.

10

While the Company uses its best estimates and assumptions as part of the purchase price allocation process to value assets acquired and liabilities assumed at the business combination date, its estimates and assumptions are subject to refinement. As a result, during the preliminary purchase price allocation period, which may be up to one year from the business combination date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. The Company records adjustments to assets acquired or liabilities assumed subsequent to the measurement period in its operating results in the period in which the adjustments were determined.

The Company allocated the purchase price for PowerReviews as follows (in thousands):

Cash and cash equivalents	$	745
Restricted cash		104
Accounts receivable		497
Prepaid expenses and other current assets		156
Property and equipment		280
Current deferred tax asset		239
Intangible assets:
Domain name (indefinite useful life)		800
Developed technology (3 year useful life)		5,400
Customer relationships (3 to 10 year useful life)		35,000
Total identified intangibles		41,200
Goodwill		113,152
Total assets acquired		156,373
Accounts payable		(304	)
Accrued liabilities		(2,167	)
Deferred revenue		(2,627	)
Non-current deferred tax liability		(521	)
Total liabilities assumed		(5,619	)
Net assets acquired	$	150,754

Using a price of $17.20 per share of common stock issued, which was the closing price of the Company’s common stock on the NASDAQ Global Market on the date of the acquisition, the consideration paid was as follows (in thousands):

Cash	$	31,059
Common stock		109,745
Fair value of vested stock options assumed		9,950
Total consideration	$	150,754

Goodwill represents the excess of the purchase price over the aggregate fair value of the net identifiable assets acquired and is not deductible for tax purposes. Goodwill for PowerReviews resulted primarily from the Company’s expectations that PowerReviews solutions will enhance the Company’s product offering and delivery. The Company integrated the PowerReviews business into the Company’s operations. Therefore, there are no separate revenue and earnings for PowerReviews since the integration.

Longboard Media, Inc.

On November 5, 2012, the Company acquired Longboard Media, Inc. (“Longboard Media”) for approximately $26.9 million in cash, 0.5 million shares of the Company’s common stock and future contingent consideration with an acquisition date fair value of $4.3 million. The contingent consideration is payable on Longboard Media’s achievement of certain performance goals as of December 31, 2013. The estimated fair value of contingent consideration was determined using a discounted cash flow model and the probability of various outcomes of achieving the performance goals. Changes in the fair value of this contingent consideration will be recorded in the income statement through the date of payout. A portion of the contingent consideration is also subject to requirements that certain identified key individuals remain employed with the Company through December 31, 2013. This portion of the contingent consideration was excluded from the purchase consideration and will be recorded as compensation expense over the period the services are provided. The Company currently estimates that approximately $2.0 million will be paid for this portion of the contingent consideration and as such has recorded compensation expense of $0.2 million for the three and nine months ended January 31, 2013. The maximum amount of contingent consideration that can be paid out is capped at $11.0 million.

11

Longboard Media is a full service media management network for retailers, shopping publishers and advertisers. Longboard Media enables retailers to launch and manage on-site advertising solutions and site monetization strategies and enables brands to target consumers across shopping publishers, mobile commerce applications and retailers. The Company accounted for the Longboard Media acquisition using the acquisition method of accounting.

The Company preliminarily allocated the purchase price to the assets acquired, including intangible assets, and liabilities assumed based on estimated fair values at the date of the acquisition. The Company estimated the value of tangible assets and liabilities based on purchase price and future intended use. The Company derived the value of intangible assets from the present value of estimated future benefits from the various intangible assets acquired.

While the Company uses its best estimates and assumptions as part of the purchase price allocation process to value assets acquired and liabilities assumed at the business combination date, its estimates and assumptions are subject to refinement. As a result, during the preliminary purchase price allocation period, which may be up to one year from the business combination date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. The Company records adjustments to assets acquired or liabilities assumed subsequent to the measurement period in its operating results in the period in which the adjustments were determined.

The Company allocated the purchase price for Longboard Media as follows (in thousands):

Cash and cash equivalents	$	588
Accounts receivable		2,899
Prepaid expenses and other current assets		53
Deferred tax asset—current		437
Intangible assets
Customer relationships (10 year useful life)		11,300
Total identified intangibles		11,300
Goodwill		28,681
Deferred tax asset—long term		1,042
Total assets acquired		45,000
Accounts payable		(3,006	)
Accrued liabilities		(1,112	)
Deferred tax liability		(3,955	)
Total liabilities assumed		(8,073	)
Net assets acquired	$	36,927

Using a price of $12.60 per share of common stock issued, which was the closing price of the Company’s common stock on the NASDAQ Global Market on the day prior to the date of acquisition, the consideration paid was as follows (in thousands):

Cash	$	26,855
Common stock		5,802
Fair value of contingent consideration		4,270
Total consideration	$	36,927

Goodwill represents the excess of the purchase price over the aggregate fair value of the net identifiable assets acquired and is not deductible for tax purposes. The goodwill for Longboard Media primarily results from the Company’s expectation to continue developing network solutions to leverage its consumer audience reach, content and data to create incremental value for its clients.

Pro Forma Adjusted Summary

The results of operations of PowerReviews and Longboard Media have been included in the Company’s unaudited condensed consolidated financial statements subsequent to the acquisition date. The following unaudited pro forma adjusted summary for the three and nine months ended January 31, 2013 and 2012 assumes that PowerReviews and Longboard Media had been acquired on May 1, 2011 (in thousands, except net loss per share data):

	Three Months  Ended January 31,						Nine Months Ended January  31,
	2013			2012			2013			2012
Pro forma adjusted total revenue	$	42,771		$	31,621		$	120,497		$	85,142
Pro forma adjusted net loss attributable to Bazaarvoice, Inc.	$	(8,662	)	$	(10,724	)	$	(36,253	)	$	(46,225	)
Pro forma adjusted net loss per share applicable to common stockholders attributable to
Bazaarvoice, Inc.:
Basic and diluted	$	(0.12	)	$	(0.41	)	$	(0.52	)	$	(1.77	)

The unaudited pro forma results for the three months ended January 31, 2012 include $1.6 million of amortization charges for acquired intangible assets and $0.6 million of stock-based expense related to the post-combination service arrangements entered into with the continuing employees. The unaudited pro forma results for the nine months ended January 31, 2012 include $4.9 million of amortization charges for acquired intangible assets, adjustments for $9.8 million of incremental stock-based expense related to the acceleration of options due to the acquisition, $1.7 million of stock-based expense related to the post-combination service arrangements entered into with the continuing employees and $4.8 million of acquisition costs.

The unaudited pro forma adjusted summary combines the historical results for Bazaarvoice for those periods with the historical results of PowerReviews and Longboard Media for the same periods. The summary is presented for informational purposes only and is not intended to be indicative of future results of operations or whether similar results would have been achieved if the acquisition had taken place at the beginning of fiscal year 2012.

5. Goodwill

At January 31, 2013, the Company had goodwill in the amount of $141.8 million. The Company assesses goodwill for impairment annually in the fourth fiscal quarter or more frequently if other indicators of potential impairment arise. There were no indicators of impairment as of January 31, 2013.

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The following table reflects the changes in goodwill for the nine months ended January 31, 2013 (in thousands):

Balance, as of April 30, 2012	$	—
Increase in goodwill related to PowerReviews acquisition		113,152
Increase in goodwill related to Longboard Media acquisition		28,681
Balance, as of January 31, 2013	$	141,833

6. Acquired Intangible Assets, net

On December 1, 2012, the Company closed an agreement to purchase customer contracts operated in Europe by Shopzilla, Inc. (“Shopzilla”) using PowerReviews technology under a license agreement between Shopzilla and PowerReviews. The Company determined that the transaction does not constitute a business combination. The entire purchase price of $4.7 million was allocated to a customer relationship intangible asset as the intent of the purchase was to gain access to Shopzilla’s contractual customer relationships. Cash remitted on the date of purchase was $4.2 million, and $0.5 million of the purchase price has been recorded as a holdback liability recorded in accrued expenses and other current liabilities. The remaining useful life of the acquired contractual customer relationships was determined to be ten years.

Acquired intangible assets, net as of January 31, 2013 from business combinations (see Note 4) and the intangible asset purchase described above are as follows (in thousands):

	Gross Fair Value		Accumulated Amortization			Net Book Value
Customer relationships	$	51,027	$	(2,622	)	$	48,405
Developed technology		5,400		(1,140	)		4,260
Domain name (indefinite useful life)		800		—			800
	$	57,227	$	(3,762	)	$	53,465

Intangible assets are amortized over their useful lives. Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. The carrying amounts of these assets are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. Recoverability of these assets is measured by comparison of the carrying amount of each asset to the future undiscounted cash flows the asset is expected to generate.

For the three and nine months ended January 31, 2013, the Company incurred amortization expense on acquired intangible assets of $1.7 and $3.7 million, respectively, of which $0.5 and $1.2 million, respectively, was included in cost of revenue. The Company did not have any acquired intangible assets at April 30, 2012, nor did it incur any amortization expense for acquired intangible assets for the three and nine months ended January 31, 2012.

7. Income Taxes

The Company uses the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities will be recognized in the period that includes the enactment date. A valuation allowance is established against the deferred tax assets to reduce their carrying value to an amount that is more likely than not to be realized.

The Company computes its interim provision for income taxes by applying the estimated annual effective tax rate to income from operations and adjusts the provision for discrete tax items occurring in the period. The Company’s effective tax rate for the three and nine months ended January 31, 2013 was 17.5% and 4.1%, respectively, compared to (2.8%) and (2.7%) for the three and nine months ended January 31, 2012, respectively. During the three months ended January 31, 2013, the Company recorded a tax benefit of $2.5 million resulting from a reduction in the valuation allowance associated with the Longboard Media acquisition. The negative tax rates for the three and nine months ended January 31, 2012 were primarily attributable to estimated foreign and state income tax expense compared to a consolidated pre-tax book loss.

8. Debt

On July 18, 2007, the Company entered into a loan and security agreement (“Loan Agreement”) with a financial institution, which was most recently amended in November 2012. As amended, the Loan Agreement provides for a revolving line of credit with a borrowing capacity of up to the lesser of (a) $30.0 million or (b) 100% of eligible monthly service fees as defined in the Loan Agreement, inclusive of any amounts outstanding under the $2.65 million sublimit for corporate credit card and letter of credit services. The revolving line of credit expires on January 31, 2015 with all advances immediately due and payable. The revolving line

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of credit bears interest at the prime based rate as defined in the Loan Agreement except during any period of time during which, in accordance with the Loan Agreement, the line bears interest at the daily adjusting LIBOR rate. Borrowings under the revolving line of credit are collateralized by substantially all assets of the Company and of its U.S. subsidiaries. The Loan Agreement contains certain financial and nonfinancial covenants. As of January 31, 2013 and 2012, the Company was in compliance with the terms of these covenants.

On November 4, 2008, the Company entered into a pledge and security agreement with a financial institution for a standby letter of credit for credit card services from a separate financial institution. As amended, the agreement provides for a standby letter of credit for credit card services in an amount not to exceed $0.5 million. The Company pledged a security interest in its money market account, in which the balance must equal at least the credit extended. This letter of credit expires annually, and the pledged security interest is recorded as short-term restricted cash in the Company’s condensed consolidated financial statements.

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Prior to its acquisition by the Company, PowerReviews entered into a standby letter of credit for approximately $0.1 million from a financial institution in favor of its sub-landlord. PowerReviews pledged a security interest in its money market account to secure the reimbursement obligations in connection with this letter of credit. This letter of credit is extended annually until terminated, and the pledged money market account is recorded as short-term restricted cash in the Company’s condensed consolidated financial statements.

9. Net Loss Per Share Applicable to Common Stockholders

The following table sets forth the computations of net loss per share applicable to common stockholders for the three and nine months ended January 31, 2013 and 2012, respectively (in thousands, except net loss per share data).

	Three Months  Ended January 31,						Nine Months Ended January  31,
	2013			2012			2013			2012
Net loss	$	(10,827	)	$	(6,575	)	$	(40,608	)	$	(17,962	)
Less accretion of redeemable convertible preferred stock		—			(10	)		—			(35	)
Net loss applicable to common stockholders	$	(10,827	)	$	(6,585	)	$	(40,608	)	$	(17,997	)
Net loss per share applicable to common stockholders, basic and diluted	$	(0.15	)	$	(0.34	)	$	(0.60	)	$	(0.93	)
Weighted average number of shares outstanding, basic and diluted		71,940			19,613			68,115			19,284
Potentially dilutive securities (1):
Outstanding stock options		4,435			5,597			6,786			5,381
Redeemable convertible preferred shares		—			27,897			—			27,897

⁽¹⁾  These securities were excluded from the computation of diluted net loss per share applicable to common stockholders because the effect would be anti-dilutive.

10. Common Stock

On July 23, 2012, the Company completed a follow-on offering in which 9,775,000 shares of its common stock were sold, of which 3,625,000 shares were offered by the Company and 6,150,000 shares were offered by selling stockholders, at a price of $15.40 per share. The gross proceeds raised by the Company from the sale of its common stock in the offering was approximately $55.8 million, resulting in net proceeds to the Company from the sale of its common stock of approximately $51.9 million, after deducting underwriting discounts and commissions of approximately $2.7 million and other offering expenses of approximately $1.2 million.

11. Commitments and Contingencies

The Company reviews the status of each matter and records a provision for a liability when it is considered both probable that a liability has been incurred and that 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 would not have a material effect on the Company’s condensed consolidated financial statements (if applicable) or discloses that an estimate of the possible loss or range of loss cannot be made.

On January 10, 2013, the U.S. Department of Justice filed a complaint against the Company with the U.S. District Court for the Northern District of California, San Francisco Division, alleging that the Company’s acquisition of PowerReviews violates Section 7 of the Clayton Act, 15 U.S.C. Section 18 and seeking the Company’s divestiture of assets sufficient to create a competing business that can replace the competitive significance of PowerReviews in the marketplace. The Company disputes the allegations and intends to vigorously contest the matter. Due to the early stages of the case, it is not possible to reliably predict the outcome of the case. Therefore, the Company cannot currently estimate the possible loss or range of loss that could result from the case.

At January 31, 2013, 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, will be between $1.1 million and $2.7 million. The Company has accrued a liability of $1.7 million, representing the best estimate of the amount within this range that will probably be incurred to settle these obligations. The estimated range includes an action plan for recovering the amounts due from the Company’s customers. If it is determined that the portion of the Company’s product offering subject to state

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sales tax is greater than that used to determine the accrual at January 31, 2013, or if there are changes in our underlying assumptions, then the actual liability incurred will likely approach the higher end of the current estimated range.

12. Subsequent Event

On March 12, 2013, a purported shareholder derivative action was filed in the Texas State District Court for Travis County, Texas against certain of the Company’s officers and directors, former officers and directors, and against the Company as nominal defendant. The complaint in this matter alleges breaches of fiduciary duties and breaches of the Company’s corporate policies in connection with the acquisition of PowerReviews and certain of the Company’s officers’ and directors’ sales of shares of the Company’s stock. The complaint requests declaratory judgment, a disgorgement of proceeds received from such sales of the Company’s stock, damages on behalf of the Company, and equitable relief. The Company disputes the allegations and intends to vigorously contest the matter. Due to the early stages of the case, it is not possible to reliably predict the outcome of the case. Therefore, the Company cannot currently estimate the possible loss or range of loss that could result from the case.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q and our other filings with the Securities and Exchange Commission (“SEC”) including our Annual Report on Form 10-K for the fiscal year ended April 30, 2012, filed on June 11, 2012, which discuss our business in greater detail.

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements may be identified by the use of forward-looking words such as “anticipate,” “believe,” “may,” “will,” “continue,” “seek,” “estimate,” “intend,” “hope,” “predict,” “could,” “should,” “would,” “project,” “plan,” “expect” or the negative or plural of these words or similar expressions, although not all forward-looking statements contain these words. These forward-looking statements include, but are not limited to, statements concerning the following:

• our ability to timely and effectively scale and adapt our existing technology and network infrastructure;

• our ability to increase adoption of our platforms by our customers’ internal and external users;

• our ability to protect our users’ information and adequately address security and privacy concerns;

• our ability to maintain an adequate rate of growth;

• our future expenses;

• the expected benefits of the PowerReviews acquisition, including the ability to establish us with small and medium-sized businesses and further expand the reach and value of our network, and our ability to achieve significant cost synergies;

• the expected benefits of the Longboard Media acquisition, including our ability to earn revenue based on ads that are served on our network;

• our plan to continue investing in long-term growth and research and development, enhancing our platforms, and pursuing strategic acquisitions of complementary businesses and technologies to drive future growth;

• our anticipated trends of our operating metrics and financial and operating results;

• the effects of increased competition in our market;

• our ability to effectively manage our growth;

• our ability to successfully enter new markets and manage our international expansion;

• our ability to maintain, protect and enhance our brand and intellectual property;

• the attraction and retention of qualified employees and key personnel; and

• our expectations regarding the outcome of litigation proceedings.

The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements, including those factors we discuss in the “Risk Factors” sections of this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K for the fiscal year ended April 30, 2012, filed on June 11, 2012, and in our other filings with the SEC. You should read these factors and the other cautionary statements made in this Quarterly Report on Form 10-Q as being applicable to all related forward-looking statements wherever they appear in this Quarterly Report on Form 10-Q. These risks are not exhaustive. Although we believe the expectations reflected in the forward-looking statements are based on reasonable assumptions, we can give no assurance we will attain these expectations or that any deviations will not be material. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q to conform these statements to actual results or to changes in our expectations.

Overview

We are a leading provider of social commerce solutions that help our clients capture, display and analyze online word of mouth, including consumer-generated ratings and reviews, questions and answers, stories, recommendations, photographs, videos and other content about our clients’ brands, products or services. Bazaarvoice, which literally means “voice of the marketplace,” was founded on the premise that online word of mouth is critical to consumers and businesses because of its influence on purchasing decisions, both online and offline. We enable our clients to place consumers at the center of their business strategies by helping consumers generate and share sentiment, preferences and other content about brands, products or services. Through our technology platforms, our clients leverage online word of mouth to increase sales, acquire new customers, improve marketing effectiveness, enhance consumer engagement across channels, increase success of new product launches, improve existing products and services, effectively scale customer support, decrease product returns and enable retailers to launch and manage on-site advertising solutions and site monetization strategies.

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We have experienced revenue growth primarily driven by our active enterprise clients who have adopted either our Conversations platform or the PowerReviews Enterprise platform. In order to take advantage of our market opportunity and to provide high levels of client service, we have expanded our number of full-time employees. We believe the growth we have experienced is further illustrated by impressions served, which we define as single instances of online word of mouth delivered to an end user’s web browser. While this metric does not drive our pricing, it measures the reach of our network to a consumer audience.

The following table summarizes these measures of our growth over the three and nine months ended January 31, 2013 and 2012:

	Three Months  Ended January 31,				Nine Months Ended January  31,
	2013		2012		2013		2012
Growth Trends:
Revenue (in thousands)	$	42,678	$	27,602	$	116,966	$	74,705
Number of active enterprise clients (period end) (1)		1,179		737		1,179		737
Full-time employees (period end)		796		608		796		608
Service as a software (“SaaS”) impressions served (in thousands) (2)		43,661		38,848		109,970		92,794

⁽¹⁾  In connection with our acquisition of PowerReviews, which closed in June 2012, we expanded the types of clients that we serve. To reflect differences among our clients and the services that we offer, we now define our clients as “active enterprise clients” and “active network clients,” the definitions of which are set forth in the Key Business Metrics section. In this Quarterly Report on Form 10-Q, historical references to active clients for periods prior to the closing of the acquisition include both active enterprise clients and active network clients on an aggregate basis. As a result of this nomenclature change resulting from our acquisition of PowerReviews, comparisons of active clients and active client retention rates for periods prior to June 2012 and after June 2012 may not be directly comparable as we have not made this distinction retrospectively. This change has a corresponding impact on metrics that are driven by number of clients, such as revenue per active client; however, we believe the change has had an immaterial impact on these metrics. Accordingly, our Key Business Metrics discuss the performance of our active enterprise clients exclusively.

⁽²⁾  The number of impressions for the three and nine months ended January 31, 2013 are exclusive of impressions served on either the PowerReviews enterprise platform or the Express platform.

For the three and nine months ended January 31, 2013, through the continued enhancement and expansion of our social commerce platforms, we achieved significant growth as compared to the three and nine months ended January 31, 2012 in both the number of active enterprise clients and the revenue we generated from our active enterprise clients. Our revenue was $42.7 million and $117.0 million for the three and nine months ended January 31, 2013, respectively, which represented a 54.6% and 56.6% increase, respectively, from the three and nine months ended January 31, 2012.

On June 12, 2012, we completed the acquisition of PowerReviews, a provider of social commerce solutions based in San Francisco, California. PowerReviews’ solutions are offered through two platforms, an enterprise platform that is similar to our Conversations platform and an Express platform that provides certain ratings and reviews solutions as a turn-key offering. Through our acquisition of PowerReviews, we added approximately 300 active enterprise clients, approximately 800 active network clients and 81 new employees to our business. We believe that the acquisition will establish us with small and medium-size businesses and further expand the reach and value of our network. We also expect to achieve significant cost synergies by combining the operations of PowerReviews with our own.

On July 23, 2012, we completed a follow-on offering in which we sold 9,775,000 shares of our common stock, of which 3,625,000 shares were offered by us and 6,150,000 shares were offered by selling stockholders, at a price of $15.40 per share. The gross proceeds raised by us from the sale of our common stock in the offering was approximately $55.8 million, resulting in net proceeds from the sale of our common stock of approximately $51.9 million, after deducting underwriting discounts and commissions of approximately $2.7 million and other offering expenses of approximately $1.2 million.

On November 5, 2012, we completed the acquisition of Longboard Media, Inc., a full service media management company that enables online retailers, shopping publishers and mobile commerce applications to launch and manage on-site advertising solutions and site monetization strategies. Through Longboard Media’s shopper media network, brand advertisers are able to target consumers throughout the online shopping experience, often immediately prior to the point of sale. It will also enable retailers to launch and manage on-site advertising solutions and site-monetization strategies.

On December 1, 2012, we closed a purchase of customer contracts operated in Europe by Shopzilla Inc. using the PowerReviews technology under a license agreement between Shopzilla and PowerReviews. Through this transaction we added 48 active enterprise clients.

We plan to continue to invest for long-term growth. We expect to continue the enhancement of our platforms by developing new solutions, adding new features and functionality and expanding the potential applications of our existing solutions. We also plan to continue our investments in research and development and to pursue strategic acquisitions of complementary businesses and technologies that will enable us to continue to drive growth in the future.

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We have experienced substantial growth in our business over the past several years, which has resulted in increased revenues over time. While we expect that our business will continue to grow, we anticipate that our revenue growth rate will generally decrease over time. As of January 31, 2013, we had 796 full-time employees, which represented an increase of 30.9% compared to the same period last year.

Business Model

Our business model focuses on maximizing the lifetime value of a client relationship. We make significant investments in acquiring new clients and believe that we will be able to achieve a favorable return on these investments by growing our relationships over time and ensuring that we have a high level of client retention.

In connection with the acquisition of new clients, we incur and recognize significant upfront costs. These costs include sales and marketing costs associated with generating client agreements, such as sales commission expenses that are recognized fully in the period in which we execute a client contract. However, we recognize revenue ratably over the entire term of those contracts, which commences only when the client is able to begin using our solution. Although we expect each client to be profitable for us over the duration of our relationship, the costs we incur with respect to any client relationship may exceed revenue in earlier periods because we recognize those costs in advance of the recognition of revenue. As a result, an increase in the mix of new clients as a percentage of total clients will initially have a negative impact on our operating results. On the other hand, we expect that a decrease in the mix of new clients as a percentage of total clients will initially have a positive impact on our operating results. Additionally, many clients pay in advance of the recognition of revenue and, as a result, our cash flow from these clients may exceed the amount of revenue recognized for those clients in earlier periods of our relationship.

Key Business Metrics

In addition to macroeconomic trends affecting the demand for our solutions, management regularly reviews a number of key financial and operating metrics to evaluate our business, determine the allocation of our resources, make decisions regarding corporate strategies and evaluate forward-looking projections and trends affecting our business. The following table summarizes our key business metrics:

	Three Months Ended January 31,						Nine Months Ended January 31,
	2013			2012			2013			2012
	(in thousands, except number of clients and client retention)
Revenue
SaaS	$	40,710		$	27,602		$	114,998		$	74,705
Media		1,968			—			1,968			—
	$	42,678		$	27,602		$	116,966		$	74,705
Cash flow used in operations	$	(6,741	)	$	(1,370	)	$	(12,705	)	$	(156	)
Number of active enterprise clients (period end)		1,179			737			1,179			737
SaaS revenue per active enterprise client (1)	$	35.6		$	38.4		$	108.8		$	112.3
Active enterprise client retention rate (2)		97.0	%		97.4	%		91.4	%		91.9	%
Total revenue per employee (3)	$	54.3		$	47.0		$	154.8		$	136.6

⁽¹⁾  Calculated based on the average number of active enterprise clients for the period on a quarterly basis.

⁽²⁾  Calculated based on active enterprise client retention over the three and nine month periods.

⁽³⁾  Calculated based on the average number of full-time employees for the three and nine month periods.

Revenue

SaaS revenue consists primarily of fees from the sale of subscriptions to our hosted social commerce solutions, and we generally recognize revenue ratably over the related subscription period, which is typically one year. We regularly review our revenue and revenue growth rate to measure our success. We believe that trends in revenue are important to understanding the overall health of our marketplace, and we use these trends in order to formulate financial projections and make strategic business decisions.

Media revenue consists primarily of fees charged to advertisers each time their advertisements are displayed on our publishers’ websites and is net of amounts due to such publishers.

Cash Flow Used in Operations

Cash flow from operations is the cash that we generate or use through the normal course of business and is measured prior to the impact of investing or financing activities. Due to the fact that we incur a significant amount of upfront costs associated with the acquisition of new clients with revenue recognized over an extended period, we consider cash flows from operations to be a key measure of our operating performance.

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Number of Active Enterprise Clients

We define an active enterprise client as an organization that has implemented either the Conversations platform or the PowerReviews enterprise platform and from which we are currently recognizing revenue, and we count organizations that are closely related as one client, even if they have signed separate contractual agreements. We believe that our ability to increase our enterprise client base is a leading indicator of our ability to grow revenue.

SaaS Revenue per Active Enterprise Client

Revenue per active enterprise client is calculated as revenue recognized during the period divided by the average number of active enterprise clients for the period. One of our key goals is to provide exceptional client service to drive client lifetime value. Our experience indicates that the better client service we provide, the more likely we are to increase our revenue per active client and retain clients. In addition, we seek to increase revenue per active client by selling our solutions to new brands within existing clients or selling additional solutions to existing clients. Indeed, many of our clients have multiple brands that have deployed our solutions. Increasing revenue per active client coupled with high client retention maximizes lifetime client value and, by extension, the value of our business. Due to the acquisition of PowerReviews, we have expanded our penetration within the small to medium business market segments. This metric may decline as we gain further traction in these market segments.

Active Enterprise Client Retention Rate

Active enterprise client retention rate is calculated based on the number of active clients at period end that were also active enterprise clients at the start of the period divided by the number of active enterprise clients at the start of the period. As mentioned above, we believe that our ability to retain our active enterprise clients and expand their use of our solutions over time is a leading indicator of the stability of our revenue base and the long-term value of our client relationships.

Total Revenue per Employee

Revenue per employee is calculated as revenue recognized during the period divided by the average number of full-time employees for the period, excluding content moderators. We believe revenue per employee is a leading indicator of our productivity and operating leverage, and we monitor revenue per employee as an indicator of our profitability because a significant portion of our cost of revenue and operating expenses are driven by our number of employees. The growth of our business is dependent on our ability to hire the talented people we require to effectively capitalize on our market opportunity and scale with rapid growth while maintaining a high level of client service. As a result, we expect revenue per employee to decrease in periods of investment when we add employees in advance of anticipated growth, particularly in periods when we are developing new markets or solutions. Our objective is to balance our investments in growth with return on investment over time and to consistently build operating leverage through productivity gains, thus increasing revenue per employee over time.

Active Network Clients

We define an active network client as an organization that has implemented one or more of our solutions but has not implemented either the Conversations or PowerReviews enterprise platforms. Such solutions may include our Connections solutions, media solutions or Express platform. We count organizations that are closely related as one client, even if they have signed separate contractual agreements. We believe that our network client base in combination with our enterprise client base is an indicator of the reach of our network.

Key Components of Our Consolidated Statements of Operations

Revenue

We generate revenue principally from fixed commitment subscription contracts under which we provide clients with various services, including access to our hosted software platforms. We sell these services under contractual agreements for service terms that are generally one year in length. Clients typically commit to fixed rate fees for the service term. Revenue from these agreements is recognized ratably over the period of service and any revenue that does not meet recognition criteria is recorded as deferred revenue on our balance sheet. We invoice clients on varying billing cycles, including annually, quarterly and monthly; therefore, our deferred revenue balance does not represent the total contract value of our non-cancelable subscription agreements. Fees payable under these agreements are due in full and non-refundable regardless of the actual use of the service and contain no general rights of return. No single client accounted for more than 10.0% of our revenue for the three and nine months ended January 31, 2013 and 2012.

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Cost of Revenue

Cost of revenue consists primarily of personnel costs and related expenses associated with employees and contractors who provide our subscription services. This includes the costs of our implementation team, which were $2.6 million and $9.1 million for the three and nine months ended January 31, 2013 and $3.1 million and $9.5 million for the three and nine months ended January 31, 2012, respectively, along with our content moderation teams and other support services provided as part of the fixed commitment subscription contracts. Cost of revenue also includes professional fees, including third-party implementation support, travel-related expenses and an allocation of general overhead costs. We allocate general overhead expenses to all departments based on the number of employees in each department, which we consider to be a fair and representative means of allocation. Personnel costs include salaries, benefits, bonuses and stock-based expense. We generally increase our capacity, particularly in the areas of implementation and support, ahead of the growth in revenue we expect those investments to drive, which can result in lower margins in the given investment period.

Cost of revenue also includes hosting costs, the amortization of capitalized internal-use software development costs incurred in connection with our hosted software platforms, and the amortization of developed technology acquired from PowerReviews. The amortization expense associated with capitalized internal-use software development costs was $0.7 million and $1.6 million for the three and nine months ended January 31, 2013 and $0.3 million and $0.7 million for the three and nine months ended January 31, 2012, respectively. The amortization expense associated with the developed technology acquired from PowerReviews was $0.5 million and $1.2 million for the three and nine months ended January 31, 2013, respectively.

We intend to continue to invest additional resources in our client services teams and in the capacity of our hosting service infrastructure and, as we continue to invest in technology innovation through our research and development organization, we may also see an increase in the amortization expense associated with capitalized internal-use software development costs incurred in connection with enhancing our software architecture and adding new features and functionality to our platforms. The level and timing of investment in these areas could affect our cost of revenue, both in terms of absolute dollars and as a percentage of revenue in the future.

Operating Expenses

We classify our operating expenses into five categories: sales and marketing; research and development; general and administrative; acquisition-related and other; and amortization of acquired intangible assets. In each category, our operating expenses consist primarily of personnel costs, program expenses, professional fees and travel-related expenses, as applicable. In addition, we allocate general overhead expenses to all departments based on the number of employees in each department, which we consider to be a fair and representative means of allocation and, as such, general overhead expenses, including depreciation and facilities costs, are reflected in each of our operating expense categories.

Sales and marketing. Sales and marketing expenses consist primarily of personnel costs for our sales, marketing and business development employees and executives, including salaries, benefits, stock-based expense, bonuses and commissions earned by our sales personnel. Also included are non-personnel costs such as professional fees, an allocation of our general overhead expenses and the costs of our marketing and brand awareness programs. Our marketing programs include our Social Summits, regional user groups, corporate communications, public relations and other brand building and product marketing expenses. We expense sales commissions when a client contract is executed because we believe our obligation to pay a sales commission arises at that time. We plan to continue investing in sales and marketing by increasing the number of direct sales personnel, expanding our domestic and international sales and marketing activities, and focusing our marketing efforts on direct sales support and pipeline generation, which we believe will enable us to add new clients and increase penetration within our existing client base. We expect that, in the future, sales and marketing expenses will increase and continue to be our largest operating cost.

Research and development. Research and development expenses consist primarily of personnel costs for our product development employees and executives, including salaries, benefits, stock-based expense and bonuses. Also included are non-personnel costs such as professional fees payable to third-party development resources and an allocation of our general overhead expenses. A substantial portion of our research and development efforts are focused on enhancing our software architecture and adding new features and functionality to our platforms to address social and business trends as they evolve, and we anticipate increasing this focus on innovation through technology. We are also incurring an increasing amount of expenses in connection with our efforts to leverage data that we and our clients collect and manage through the use of our solutions. We therefore expect that, in the future, research and development expenses will increase, as will the amount of development expenses capitalized in connection with our internal-use hosted software platforms.

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General and administrative. General and administrative expenses consist primarily of personnel costs, including salaries, benefits, stock-based expense and bonuses for our administrative, legal, human resources, finance, accounting and information technology employees and executives. Also included are non-personnel costs, such as travel-related expenses, professional fees and other corporate expenses, along with an allocation of our general overhead expenses. We expect to incur incremental costs associated with supporting the growth of our business, both in terms of size and geographical diversity, and to meet the increased compliance requirements associated with being a public company. Those costs include increases in our accounting and legal personnel, additional consulting, legal, audit and tax fees, insurance costs, board of directors’ compensation and the costs of achieving and maintaining compliance with Section 404 of the Sarbanes-Oxley Act. As a result, we expect our general and administrative expenses to increase in absolute dollars in future periods but to decrease as a percentage of revenue over time.

Acquisition-related and other. Acquisition-related and other expenses consisted of costs incurred related to the acquisition of PowerReviews and Longboard Media and included legal, banking, accounting and other advisory fees of third parties and severance costs for employees.

Amortization of acquired intangible assets. The amortization of acquired intangible assets represents amortization of acquired customer relationship intangible assets from PowerReviews and Longboard Media.

Other Income (Expense)

Other income (expense) consists primarily of interest income, foreign exchange gains and losses and the resulting gain or loss from foreign exchange contracts. Interest income represents interest received on our cash and investments of proceeds received from our initial public offering and follow-on offering. Foreign exchange gains and losses arise from revaluations of foreign currency denominated monetary assets and liabilities and are partially offset by the change in market value of our foreign exchange contracts.

Income Tax Expense

As a result of our current net operating loss position in the United States, income tax expense consists primarily of corporate income taxes resulting from profits generated in foreign jurisdictions by wholly-owned subsidiaries, along with state income taxes payable in the United States. We expect our income tax expense to increase in the future, as our profits increase both in the United States and in foreign jurisdictions.

Results of Operations

The following tables set forth our results of operations for the specified periods. The period-to-period comparisons of results of operations are not necessarily indicative of results for future periods.

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Consolidated Statements of Operations Data:

	Three Months Ended January 31,						Nine Months Ended January 31,
	2013			2012			2013			2012
	(in thousands)						(in thousands)
Revenue	$	42,678		$	27,602		$	116,966		$	74,705
Cost of revenue (1)		14,217			9,514			40,949			26,116
Gross profit		28,461			18,088			76,017			48,589
Operating expenses:
Sales and marketing (1)		20,710			12,152			53,882			35,469
Research and development (1)		8,914			6,059			24,356			13,978
General and administrative (1)		8,783			5,934			32,463			15,848
Acquisition-related and other		2,021			—			4,771			—
Amortization of acquired intangible assets		1,165			—			2,543			—
Total operating expenses		41,593			24,145			118,015			65,295
Operating loss		(13,132	)		(6,057	)		(41,998	)		(16,706	)
Total other income (expense), net		12			(337	)		(341	)		(788	)
Loss before income taxes		(13,120	)		(6,394	)		(42,339	)		(17,494	)
Income tax expense		(2,293	)		181			(1,731	)		468
Net loss	$	(10,827	)	$	(6,575	)	$	(40,608	)	$	(17,962	)
Other Data:
Adjusted EBITDA (2)	$	(5,510	)	$	(2,985	)	$	(12,256	)	$	(9,396	)

⁽¹⁾  Includes stock-based expense as follows:

Cost of revenue	$	443	$	319	$	1,320	$	986
Sales and marketing		710		419		3,405		1,233
Research and development		674		356		2,370		920
General and administrative		1,312		1,409		11,977		2,619
	$	3,139	$	2,503	$	19,072	$	5,758

⁽²⁾  We define Adjusted EBITDA as net loss adjusted for stock-based expense, adjusted depreciation and amortization (which excludes amortization of capitalized internal-use software development costs), integration and other costs related to acquisitions, income tax expense and other (income) expense, net. Adjusted EBITDA is a financial measure that is not calculated in accordance with U.S. GAAP.

Adjusted EBITDA should not be considered as an alternative to net loss, operating loss or any other measure of financial performance calculated and presented in accordance with U.S. GAAP. Our Adjusted EBITDA may not be comparable to similarly titled measures of other organizations because other organizations may not calculate Adjusted EBITDA in the same manner. We prepare Adjusted EBITDA to eliminate the impact of items that we do not consider indicative of our core operating performance. You are encouraged to evaluate these adjustments and the reason we consider them appropriate.

We believe Adjusted EBITDA is useful to investors in evaluating our operating performance for the following reasons:

• Adjusted EBITDA is widely used by investors and securities analysts to measure a company’s operating performance without regard to items, such as stock-based expense, adjusted depreciation and amortization, income tax expense and other income, net, that can vary substantially from company to company depending upon their financing, capital structures and the method by which assets were acquired;

• Our management uses Adjusted EBITDA in conjunction with U.S. GAAP financial measures for planning purposes, including the preparation of our annual operating budget, as a measure of operating performance and the effectiveness of our business strategies and in communications with our board of directors concerning our financial performance;

• Adjusted EBITDA provides consistency and comparability with our past financial performance, facilitates period-to-period comparisons of operations and also facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their U.S. GAAP results; and

• We anticipate that our investor and analyst presentations will continue to include Adjusted EBITDA as a supplemental measure to evaluate our overall operating performance.

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We understand that, although Adjusted EBITDA is frequently used by investors and securities analysts in their evaluations of companies, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results of operations as reported under U.S. GAAP. These limitations include:

• Adjusted depreciation and amortization are non-cash charges, and the assets being depreciated or amortized will often have to be replaced in the future; Adjusted EBITDA does not reflect any cash requirements for these replacements;

• Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs or contractual commitments;

• Adjusted EBITDA does not reflect cash requirements for income taxes and the cash impact of other income; and

• Other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure

The following table presents a reconciliation of Adjusted EBITDA to net loss, the most comparable U.S. GAAP measure, for each of the periods indicated, in thousands.

	Three Months  Ended January 31,						Nine Months Ended January  31,
	2013			2012			2013			2012
	(in thousands)						(in thousands)
Adjusted EBITDA:
GAAP net loss	$	(10,827	)	$	(6,575	)	$	(40,608	)	$	(17,962	)
Stock-based expense		3,139			2,503			19,072			5,758
Adjusted depreciation and amortization		2,462			569			5,899			1,552
Acquisition-related and other expense		2,021			—			4,771			—
Income tax expense (benefit)		(2,293	)		181			(1,731	)		468
Total other (income) expense, net		(12	)		337			341			788
Adjusted EBITDA	$	(5,510	)	$	(2,985	)	$	(12,256	)	$	(9,396	)

The following tables set forth our results of operations for the specified periods as a percentage of revenue. The period-to-period comparisons of results are not necessarily indicative of results for future periods.

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Consolidated Statements of Operations Data:

	Three Months  Ended January 31,						Nine Months Ended January  31,
	2013			2012			2013			2012
Revenue		100.0	%		100.0	%		100.0	%		100.0	%
Cost of revenue (1)		33.3			34.5			35.0			35.0
Gross profit		66.7			65.5			65.0			65.0
Operating expenses:
Sales and marketing (1)		48.5			44.0			46.1			47.5
Research and development (1)		20.9			22.0			20.8			18.7
General and administrative (1)		20.6			21.5			27.8			21.2
Acquisition related		4.7			—			4.1			—
Amortization of acquired intangible assets		2.8			—			2.1			—
Total operating expenses		97.5			87.5			100.9			87.4
Operating loss		(30.8	)		(22.0	)		(35.9	)		(22.4	)
Total other income (expense), net		—			(1.2	)		(0.3	)		(1.1	)
Loss before income taxes		(30.8	)		(23.2	)		(36.2	)		(23.4	)
Income tax expense		(5.4	)		0.7			(1.5	)		0.6
Net loss		(25.4	)%		(23.8	)%		(34.7	)%		(24.0	)%
Other Data:
Adjusted EBITDA (2)		(12.9	)%		(10.8	)%		(10.5	)%		(12.6	)%
(1)       Includes stock-based expense as follows:
Cost of revenue		1.0	%		1.2	%		1.1	%		1.3	%
Sales and marketing		1.7			1.5			2.9			1.7
Research and development		1.6			1.3			2.0			1.2
General and administrative		3.1			5.1			10.2			3.5
		7.4	%		9.1	%		16.3	%		7.7	%

⁽²⁾ We define Adjusted EBITDA as net loss adjusted for stock-based expense, adjusted depreciation and amortization (which excludes amortization of capitalized internal-use software development costs), acquisition-related costs, income tax expense and other (income) expense, net. See note ⁽²⁾ to the Consolidated Statement of Operations Data on page 23 of this Quarterly Report on Form 10-Q for a reconciliation of net loss to Adjusted EBITDA.

Comparison of the Three Months Ended January 31, 2013 and 2012

Revenue

	Three Months Ended January 31,
	2013		2012		% Change
	(dollars in thousands)
Revenue	$	42,678	$	27,602		54.6	%

Our revenue increased by $15.1 million, or 54.6%, for the three months ended January 31, 2013 compared to the three months ended January 31, 2012. Of this increase, $7.2 million was generated from new clients utilizing our platforms as we continued to increase the market penetration of our solutions, as well as the revenue contribution from our new clients related to our recent acquisition of PowerReviews. Included in the increase is $2.0 million of media revenue resulting from the acquisition of Longboard Media. The remaining $5.9 million increase was generated from existing clients due to increased subscriptions of our products and offerings coupled with our client retention which was 88.3% for the 12 months ended January 31, 2013, partially offset by decreasing revenue per client (in thousands), which was $35.6 for the three months ended January 31, 2013 and $38.4 for the three months ended January 31, 2012.

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Cost of Revenue and Gross Profit Percentage

	Three Months Ended January 31,
	2013			2012			% Change
	(dollars in thousands)
Cost of revenue (1)	$	14,217		$	9,514			49.4	%
Gross profit		28,461			18,088			57.3	%
Gross profit percentage(2)		66.7	%		65.5	%

⁽¹⁾ Includes amortization of intangible assets of $0.5 million for the three months ended January 31, 2013 and none for the three months ended January 31, 2012.

⁽²⁾  Gross Profit percentage was higher for the three months ended January 31, 2013 as this was the first quarter that included media revenue which generated a higher gross profit percentage than our SaaS revenue.

Cost of Revenue. Cost of revenue increased $4.7 million, or 49.4%, for the three months ended January 31, 2013 compared to the three months ended January 31, 2012. This increase was primarily due to increases of $2.2 million in personnel-related expenses, $0.4 million in professional fees and $0.2 million in facility-related expenses as we continue to expand the capacity of our infrastructure. We also incurred a $1.9 million increase in costs associated with hosting services, amortization of developed technology acquired from PowerReviews and amortization of capitalized internal-use software development costs.

Operating Expenses

	Three Months Ended January 31,
	2013					2012
	Amount		% Rev.			Amount		% Rev.			% Change
	(dollars in thousands)
Sales and marketing	$	20,710		48.5	%		12,152		44.0	%		70.4	%
Research and development		8,914		20.9			6,059		22.0			47.1
General and administrative		8,783		20.6			5,934		21.5			48.0
Acquisition-related and other		2,021		4.7			—		—			n/a
Amortization of acquired intangible assets		1,165		2.8			—		—			n/a
Total operating expenses	$	41,593		97.5	%		24,145		87.5	%		72.3	%

Sales and marketing. Sales and marketing expenses increased $8.6 million, or 70.4%, for the three months ended January 31, 2013 compared to the three months ended January 31, 2012. This increase was primarily due to an increase in sales and marketing staff, including increases of $5.1 million for personnel-related expenses, $1.6 million for travel-related expenses and $0.3 million of facility-related expenses. Included in the increase for personnel-related expenses is $1.0 million resulting from the acquisition of Longboard Media. Professional fees increased by $0.8 million. Additionally, we incurred a $0.8 million expense due to an increase in estimates of uncollectible sales tax liabilities.

Research and development. Research and development expenses increased $2.9 million, or 47.1%, for the three months ended January 31, 2013 compared to the three months ended January 31, 2012. This increase was primarily due to an increase in personnel-related expenses of $1.8 million as we continued to expand our research and development team. This expansion also resulted in increases of $0.1 million each in travel and facility-related expenses. We also experienced increases of $0.9 million in professional fees.

General and administrative. General and administrative expenses increased $2.8 million, or 48.0%, for the three months ended January 31, 2013 compared to the three months ended January 31, 2012. This was primarily due to an increase in our staffing to support infrastructure growth and additional expenses associated with being a publicly traded company. These increases include a $1.1 million increase in facility-related fees, a $0.8 million increase in personnel-related expenses and a $0.1 million increase in travel-related expenses. Professional fees increased by $0.8 million.

Acquisition-related and other. We incurred $2.0 million in acquisition-related expenses for the three months ended January 31, 2013, including $1.2 million of legal and advisory fees primarily for the U.S. Department of Justice suit related to our acquisition of PowerReviews and $0.4 million each for severance to former PowerReviews executives, and legal and advisory expenses related to our acquisition of Longboard Media.

Amortization of acquired intangibles. Amortization of acquired intangibles represents amortization of the customer relationships purchased in the PowerReviews and Longboard Media acquisitions. This amortization is presented separately in the statement of operations and was $1.2 million for the three months ended January 31, 2013.

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Other Income (Expense), Net

	Three Months Ended January 31,
	2013						2012
	Amount			% Rev.			Amount			% Rev.			% Change
	(dollars in thousands)
Interest income	$	61			0.1	%		4			—	%		1,425.0	%
Other income (expense)		(49	)		(0.1	)		(341	)		(1.2	)		(85.6	)
Total other income (expense), net	$	12			—	%		(337	)		(1.2	)%		(103.6	)%

Interest income increased by $0.1 million during the three months ended January 31, 2013 compared to the three months ended January 31, 2012 primarily due to returns on our investments of proceeds from our initial public offering and follow-on offering. Other income increased by $0.3 million for the three months ended January 31, 2013 compared to the three months ended January 31, 2012, due primarily to changes in realized and unrealized gains on transactions in foreign currencies.

Income Tax Expense

	Three Months Ended January 31,
	2013						2012
	Amount			% Rev.			Amount		% Rev.			% Change
	(dollars in thousands)
Income tax expense (benefit)	$	(2,293	)		(5.4	)%		181		0.7	%		(1,366.9	)%

We recognized a net income tax benefit of $2.3 million for the three months ended January 31, 2013 compared to income tax expense of $0.2 million for the three months ended January 31, 2012, primarily as the result of a $2.5 million tax benefit from a reduction in the valuation allowance related to our acquisition of Longboard Media.

Comparison of the Nine Months Ended January 31, 2013 and 2012

Revenue

	Nine Months Ended January 31,
	2013		2012		% Change
	(dollars in thousands)
Revenue	$	116,966	$	74,705		56.6	%

Our revenue increased by $42.3 million, or 56.6%, for the nine months ended January 31, 2013 compared to the nine months ended January 31, 2012. Of this increase, $16.1 million was generated from new clients utilizing our platforms as we continued to increase the market penetration of our solutions and revenue contributions from our new clients related to our recent acquisition of PowerReviews. Included in the increase is $2.0 million of media revenue resulting from the acquisition of Longboard Media. The remaining $24.2 million increase was generated from existing clients, due to increased subscriptions of our products and offerings coupled with our client retention which was 88.3% for the 12 months ended January 31, 2013, partially offset by decreasing revenue per client (in thousands), which was $108.8 for the nine months ended January 31, 2013 and $112.3 for the nine months ended January 31, 2012.

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Cost of Revenue and Gross Profit Percentage

	Nine Months Ended January 31,
	2013			2012			% Change
	(dollars in thousands)
Cost of revenue(1)	$	40,949		$	26,116			56.8	%
Gross profit		76,017			48,589			56.4	%
Gross profit percentage		65.0	%		65.0	%

⁽¹⁾  Includes amortization of intangible assets of $1.2 million for the nine months ended January 31, 2013 and none for the nine months ended January 31, 2012.

Cost of Revenue. Cost of revenue increased $14.8 million, or 56.8%, for the nine months ended January 31, 2013 compared to the nine months ended January 31, 2012. This increase was primarily due to increases of $6.5 million in personnel-related expenses, $1.6 million in professional fees, $0.9 million in facility-related expenses as we continue to expand the capacity of our infrastructure and $0.3 million in travel-related expenses. We also incurred a $5.5 million increase in costs associated with hosting services, amortization of developed technology acquired from PowerReviews and amortization of capitalized internal-use software development costs.

Operating Expenses

	Nine Months Ended January 31,
	2013					2012
	Amount		% Rev.			Amount		% Rev.			% Change
	(dollars in thousands)
Sales and marketing	$	53,882		46.1	%		35,469		47.5	%		51.9	%
Research and development		24,356		20.8			13,978		18.7			74.2
General and administrative		32,463		27.8			15,848		21.2			104.8
Acquisition-related and other		4,771		4.1			—		—			n/a
Amortization of acquired intangible assets		2,543		2.1			—		—			n/a
Total operating expenses	$	118,015		100.9	%		65,295		87.4	%		80.7	%

Sales and marketing. Sales and marketing expenses increased $18.4 million, or 51.9%, for the nine months ended January 31, 2013 compared to the nine months ended January 31, 2012. This increase was primarily due to an increase in sales and marketing staff, including increases of $13.1 million for personnel-related expenses which included $1.2 million of stock-based expense related to the termination of former PowerReviews executives after the acquisition, $2.7 million for travel-related expenses, $1.0 million resulting from the acquisition of Longboard Media and $0.9 million of facility-related expenses. Professional fees increased by $0.9 million. Additionally, we incurred a $0.8 million expense due to an increase in estimates of uncollectible sales tax liabilities.

Research and development. Research and development expenses increased $10.4 million, or 74.2%, for the nine months ended January 31, 2013 compared to the nine months ended January 31, 2012. This increase was primarily due to an increase in personnel-related expenses of $7.0 million as we continued to expand our research and development team. This expansion also resulted in increases of $0.8 million each in travel and facility-related expenses. We also experienced increases of $1.8 million in professional fees due to increased use of third party contractor resources.

General and administrative. General and administrative expenses increased $16.6 million, or 104.8%, for the nine months ended January 31, 2013 compared to the nine months ended January 31, 2012. This was primarily due to an increase in our staffing and facilities to support infrastructure growth and additional expenses associated with being a publicly traded company. The increase was primarily due to an $11.5 million increase in personnel-related expenses which included $8.6 million of stock-based expense related to the termination of former PowerReviews executives after the acquisitions, a $2.1 million increase in facility-related fees, a $0.4 million increase in depreciation and amortization, and a $0.1 million increase in travel-related expenses. Professional fees increased by $2.5 million.

Acquisition-related and other. We incurred $4.8 million in acquisition-related expenses for the nine months ended January 31, 2013. $4.0 million of these expenses were for our acquisition of PowerReviews, including $1.0 million in legal and advisory fees, $1.1 million in severance to former PowerReviews executives and $1.9 million in legal fees for the U.S. Department of Justice suit related to the acquisition. The remaining $0.8 million was for legal and advisory expenses related to our acquisition of Longboard Media.

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Amortization of acquired intangibles. Amortization of acquired intangibles represents amortization of the customer relationships purchased in the PowerReviews and Longboard Media acquisitions. This amortization is presented separately in the statement of operations and was $2.5 million for the nine months ended January 31, 2013.

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Other Income (Expense), Net

	Nine Months Ended January 31,
	2013						2012
	Amount			% Rev.			Amount			% Rev.			% Change
	(dollars in thousands)
Interest income	$	110			0.1	%		17			0.0	%		547.1	%
Other income (expense)		(451	)		(0.4	)		(805	)		(1.1	)		(44.0	)
Total other income (expense), net	$	(341	)		(0.3	)%		(788	)		(1.1	)%		(56.7	)%

Interest income increased by $0.1 million during the nine months ended January 31, 2013 compared to the nine months ended January 31, 2012 primarily due to returns on our investments of proceeds from our initial public offering in February 2012 and our follow-on offering in July 2012. Other expense decreased by $0.4 million for the nine months ended January 31, 2013 compared to the nine months ended January 31, 2012, due primarily to changes in realized and unrealized gains on transactions in foreign currencies.

Income Tax Expense

	Nine Months Ended January 31,
	2013						2012
	Amount			% Rev.			Amount		% Rev.			% Change
	(dollars in thousands)
Income tax expense (benefit)	$	(1,731	)		(1.4	)%		468		0.6	%		(469.9	)%

We recognized a net income tax benefit of $1.7 million for the nine months ended January 31, 2013 compared to income tax expense of $0.5 million for the nine months ended January 31, 2012, primarily as the result of a $2.5 million tax benefit from a reduction in the valuation allowance related to our acquisition of Longboard Media.

Liquidity and Capital Resources

Our principal source of liquidity at January 31, 2013 consisted of $105.5 million of cash and cash equivalents and short-term investments. We also have a revolving line of credit with a borrowing capacity of up to $30.0 million. Cash and cash equivalents consist of cash, money market funds and U.S. treasury securities. Our short-term investments consist of certificates of deposit, U.S. treasury securities and corporate securities backed by the U.S. Department of the Treasury.

Our principal needs for liquidity include funding our ongoing operations, working capital requirements, capital expenditures and acquisitions. We believe that our available resources are sufficient to fund our liquidity requirements for at least the next 12 months.

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. Our future capital requirements will depend on many factors, including our rate of client and revenue growth, the expansion of our sales and marketing activities, the timing and extent of spending to support product development efforts, the timing of introductions of new features and enhancements to our social commerce platforms, and future acquisitions of, or investments in, complementary businesses and technologies. To the extent that existing cash, cash equivalents and short-term investments along with future cash flow from operations are insufficient to fund our future activities, we may need to raise additional funds through public or private equity or debt financing. Additional funds may not be available on terms favorable to us or at all.

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The following table summarizes our cash flows for the periods indicated:

	Nine Months Ended January 31,
	2013			2012
	(in thousands)
Net cash used in operating activities	$	(12,705	)	$	(156	)
Net cash used in investing activities		(99,549	)		(4,056	)
Net cash provided by financing activities		61,778			1,540

Net Cash Used in Operating Activities

Net cash used in operating activities is primarily influenced by the amount of cash we invest in personnel and infrastructure to support the anticipated growth of our business, the increase in the number of clients using our platforms and the amount and timing of client payments. The amount of cash used in operating activities over the last two years has been relatively small as compared to our net loss for the periods. The offsetting generation of cash has come from changes in our operating assets and liabilities, particularly in the area of deferred revenue.

For the nine months ended January 31, 2013, operating activities used $12.7 million of cash after changes in our operating assets and liabilities offset a net loss of $40.6 million, which included non-cash depreciation and amortization of $7.5 million, non-cash stock-based expense of $19.1 million, non-cash bad debt expense of $1.6 million and a non-cash tax benefit related to stock options of $0.4 million. Accounts payable, accrued expenses, deferred revenue and other liabilities increased $9.2 million, which offset an increase of $9.2 million in accounts receivable, prepaid expenses and other assets. The increase in our accounts receivable, accounts payable and accrued expenses and other current liabilities was primarily due to our continued growth during the nine months ended January 31, 2013.

For the nine months ended January 31, 2012, operating activities used $0.2 million of cash after changes in our operating assets and liabilities offset a net loss of $18.0 million, which included non-cash depreciation and amortization of $2.2 million, non-cash stock-based expense of $5.8 million and non-cash bad debt expense of $1.0 million. Accounts payable, accrued expenses and other liabilities increased $7.1 million and deferred revenue increased $10.0 million, partially offset by an increase of $8.2 million in accounts receivable, prepaid expenses and other assets. The increase in our deferred revenue, accounts payable and accrued expenses and other current liabilities was primarily due to our continued growth in the nine months ended January 31, 2012.

Net Cash Used in Investing Activities

For the nine months ended January 31, 2013, investing activities used $99.5 million, which included $60.8 million, net of cash acquired, used in our acquisitions of PowerReviews, Longboard Media, and the purchase of customer contracts from Shopzilla. The remainder of our investing activities were related to the purchase and maturity of short-term investments, purchase of property, plant and equipment and costs capitalized as a result of our internal-use software.

For the nine months ended January 31, 2012, investing activities used $4.1 million, primarily related to the purchase of property and equipment, including technology hardware and software to support our growth as well as costs capitalized in connection with the development of our internal-use hosted software platforms.

Purchases of property and equipment may vary from period to period due to the timing of the expansion of our operations and the development cycles of our internal-use hosted software platforms. We expect to continue to invest in short-term investments, property and equipment and developing our software platforms for the foreseeable future.

Net Cash Provided by Financing Activities

Our financing activities have consisted primarily of net proceeds from the issuance of common and preferred stock and proceeds from the exercises of options to purchase common stock.

For the nine months ended January 31, 2013, financing activities provided $61.8 million, which included $51.9 million of net proceeds from our follow-on offering in July 2012 and $9.5 million of proceeds from the exercise of options to purchase shares of our common stock.

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For the nine months ended January 31, 2012, we received $2.5 million from the exercise of options to purchase common stock and used $1.0 million for payments of initial stock offering costs.

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Contractual Obligations and Commitments

We have non-cancelable operating lease obligations related to our office space, the largest of which is for our headquarters in Austin, Texas. We do not have any debt or material capital lease obligations and all of our property, equipment and software has been purchased with cash. We have no material purchase obligations outstanding with any vendors or third parties.

On July 18, 2007, we entered into a loan and security agreement, or the Loan Agreement, with a financial institution, which was most recently amended in November 2012. As amended, the Loan Agreement provides for a revolving line of credit with a borrowing capacity of up to the lesser of (a) $30.0 million or (b) 100% of eligible monthly service fees as defined in the Loan Agreement, inclusive of any amounts outstanding under the $2.65 million sublimit for corporate credit card and letter of credit services.

As of January 31, 2013, there were no loans outstanding under our revolving line of credit other than a $1.9 million letter of credit issued by the financial institution in favor of the landlord of the leased office space, which is serving as our headquarters in Austin, Texas. Borrowings under the revolving line of credit are collateralized by substantially all of our assets and the assets of our U.S. subsidiaries and bear interest at a floating interest rate equal to the prime rate (or the financial institution’s daily adjusting LIBOR rate plus 2.5% if greater), which is payable monthly. The revolving line of credit expires and all interest and principal thereunder is payable in full on January 31, 2015.

The Loan Agreement contains certain restrictive covenants that limit our ability and our subsidiaries’ abilities to, among other things, incur additional indebtedness or guarantee indebtedness of others; make payments on additional indebtedness or make changes to certain agreements related to additional indebtedness; enter into hedging arrangements; create liens on our assets; make loans and investments; make capital expenditures; dispose of assets; store inventory and equipment with others; pay dividends or make distributions on, or purchase or redeem, our capital stock; enter into mergers or consolidations with or into other entities; undergo a change of control; engage in different lines of business; or enter into transactions with affiliates. The Loan Agreement also contains numerous affirmative covenants, including covenants regarding, among other things, compliance with applicable laws and regulations, reporting, payment of taxes and other obligations, maintenance of insurance coverage, maintenance of bank and investment accounts with the financial institution and its affiliates, registration of intellectual property rights, and obtaining certain third-party consents and waivers. As of January 31, 2013, we were in compliance with the terms of these covenants.

On November 4, 2008, we entered into a pledge and security agreement with a financial institution for a standby letter of credit for credit card services from a separate financial institution for an amount not to exceed $0.1 million. We pledged a security interest in our money market account, in which the balance must equal at least the credit extended. On March 17, 2010, the standby letter of credit for credit card services was increased to $0.3 million. On May 18, 2011, the standby letter of credit for credit card services was increased to $0.5 million. This letter of credit expires annually and the pledged security interest is recorded as short-term restricted cash in our condensed consolidated financial statements.

On July 23, 2012, we assumed an agreement from PowerReviews that requires us to maintain cash balances at Silicon Valley Bank of no less than $0.1 million through June 15, 2015 as a security deposit for subleasing office space in San Francisco, California. The restricted cash balance is included in restricted cash in our condensed consolidated financial statements.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies and the Use of Estimates

Preparation of our condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. We believe the most complex and sensitive judgments, because of their significance to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. Management’s Discussion and Analysis and Note 2 to the consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended April 30, 2012, filed on June 11, 2012 describe the significant accounting estimates and policies used in preparation of the condensed consolidated financial statements. Actual results in these areas could differ from management’s estimates. During the three and nine months ended January 31, 2013, there were no significant changes in our critical accounting policies or estimates from those reported in our Annual Report on Form 10-K for the fiscal year ended April 30, 2012, filed on June 11, 2012.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

We have operations both within the United States and internationally, and we are exposed to market risks in the ordinary course of our business, including the effect of interest rate changes and foreign currency fluctuations. Information relating to quantitative and qualitative disclosures about these market risks is set forth below.

Interest Rate Sensitivity

We hold cash, cash equivalents and short-term investments for working capital purposes. We do not have material exposure to market risk with respect to these investments. We do not use derivative financial instruments for speculative or trading purposes; however, we may adopt specific hedging strategies in the future. Any declines in interest rates will reduce future interest income.

Foreign Currency Risk

Our results of operations and cash flows are subject to fluctuations because of changes in foreign currency exchange rates, particularly changes in exchange rates between the U.S. dollar and the Euro and British Pound, the currencies of countries where we currently have our most significant international operations. On a historical basis, invoicing has largely been denominated in U.S. dollars; however; we expect an increasing proportion of our future business to be conducted in currencies other than U.S. dollars. Our expenses are generally denominated in the currencies of the countries in which our operations are located, with our most significant operations today being located in the United States, the United Kingdom, Germany, France, Australia and Sweden.

We assess the market risk of changes in foreign currency exchange rates utilizing a sensitivity analysis that measures the potential impact on earnings, fair values and cash flows of a hypothetical 10% change in the value of the U.S. dollar on foreign currency denominated monetary assets and liabilities. The effect of an immediate 10% adverse change in exchange rates on foreign currency denominated monetary assets and liabilities, principally accounts receivable and intercompany balances, as of January 31, 2013, would be immaterial.

We have recently entered into forward exchange contracts to partially hedge our exposure to these foreign currencies. We did not enter into any derivative financial instruments for trading or speculative purposes. We may enter into additional forward exchange contracts to further contain our exposure to foreign currencies fluctuations. To date, we have hedged against some of the fluctuations in currency exchange rates, however fluctuations in exchange rates could still cause harm to our business in the future.

Inflation Risk

We do not believe that inflation has had a material effect on our business, financial condition or results of operations. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition and results of operations.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining adequate disclosure controls and procedures. Management, with the participation of our chief executive officer and our chief financial officer and review of our Audit Committee, evaluated the effectiveness of our disclosure controls and procedures as of January 31, 2013. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of January 31, 2013, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended January 31, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we are subject to legal proceedings and litigation arising in the ordinary course of business, including, but not limited to, certain pending patent and privacy matters, including inquiries, investigations, audits and other regulatory proceedings, such as the investigation described below. Except for the lawsuit described below, we believe that there are no claims or actions pending or threatened against us, the ultimate disposition of which would have a material adverse effect on us.

On January 10, 2013, the U.S. Department of Justice filed a complaint against us with the U.S. District Court for the Northern District of California, San Francisco Division, alleging that our acquisition of PowerReviews violates Section 7 of the Clayton Act, 15 U.S.C. Section 18 and seeking the divestiture of assets sufficient to create a competing business that can replace the competitive significance of PowerReviews in the marketplace. We dispute the allegations and intend to vigorously contest the matter.

On March 12, 2013, a purported shareholder derivative action was filed in the Texas State District Court for Travis County, Texas against certain of our officers and directors, former officers and directors, and against us as nominal defendant in Edmans v. Hurt et al., Case No. D-1-GN-13-000874. The complaint in this matter alleges breaches of fiduciary duties and breaches of our corporate policies in connection with our acquisition of PowerReviews and certain of our officers’ and directors’ sales of shares of our stock. The complaint requests declaratory judgment, a disgorgement of proceeds received from such sales of our stock, damages on our behalf, and equitable relief. We dispute the allegations and intend to vigorously contest the matter.

Item 1A. Risk Factors

Risks Related to Our Business

We are an early stage company with a limited operating history, which makes it difficult to evaluate our current business and future prospects and may increase the risk of your investment.

We began our operations in May 2005. Our limited operating history may make it difficult to evaluate our current business and our future prospects. We have encountered and will continue to encounter risks and difficulties frequently experienced by growing companies in rapidly developing and changing industries, including challenges in forecasting accuracy, determining appropriate investments of our limited resources, market acceptance of our existing and future solutions, managing client implementations and developing new solutions. Our current operating model may require changes in order for us to achieve profitability and scale our operations efficiently. For example, we may need to enhance our software architecture to allow us to efficiently and cost effectively develop and implement new solutions, make our solutions easy to implement and download, ensure our marketing engine is designed to drive highly qualified leads cost effectively and implement changes in our sales model to improve the predictability of our sales and reduce our sales cycle. If we fail to implement these changes on a timely basis or are unable to implement them due to factors beyond our control, our business may suffer. You should consider our business and prospects in light of the risks and difficulties we face as an early-stage company.

We have a history of losses and we may not achieve or sustain profitability in the future.

We have incurred significant losses in each fiscal period since our inception in 2005. We experienced a net loss of $40.6 million for the nine months ended January 31, 2013 and $24.3 million during fiscal year 2012. At January 31, 2013, we had an accumulated deficit of $105.8 million. The losses and accumulated deficit were due to the substantial investments we made to grow our business and acquire clients. Expenses associated with the integration of the customers, employees and operations of PowerReviews and Longboard Media into our business could further delay our profitability. We anticipate that our operating expenses will increase substantially in the foreseeable future as we continue to invest to grow our business and acquire clients, develop our platforms and develop new products and solutions. These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses. Many of our efforts to generate revenue from our business are new and unproven, and any failure to increase our revenue or generate revenue from new products and solutions could prevent us from attaining or increasing profitability. Furthermore, to the extent we are successful in increasing our client base, we could also incur increased losses because costs associated with entering into client agreements are generally incurred up front, while revenue is generally recognized ratably over the term of the agreement. We cannot be certain that we will be able to attain or increase profitability on a client-by-client basis or on a quarterly or annual basis. If we are unable to effectively manage these risks and difficulties as we encounter them, our business, financial condition and results of operations may suffer.

We operate in a new and unproven market for social commerce solutions. Our success depends upon the continued development of this market, and if the market does not develop as we expect, our business could be harmed.

We are focused on the market for social commerce solutions, which is new and unproven with little market research or data. It is uncertain whether the market in which we operate will continue to develop or if our solutions will achieve and sustain a level of demand and market acceptance sufficient for us to continue to generate revenue and achieve profitability. Due to our evolving business model, the uncertain size of our market and the unpredictability of future general economic and financial market conditions, we may not be able to forecast our growth rate accurately.

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In particular, we believe our success will depend to a large extent on the willingness of brands to use online word of mouth in their marketing and advertising materials. Many of our potential clients remain hesitant to embrace our solutions, such as Ratings & Reviews, since they are uncomfortable displaying negative reviews about products or services offered on their websites. In addition, many brands may continue to devote significant portions of their marketing and advertising budgets to traditional, offline media or other types of online marketing or advertising initiatives that do not use online word of mouth. Some brands may be open to the idea of making online word of mouth available to consumers and yet may be unwilling or unable to implement third-party SaaS solutions similar to ours. We believe that the continued growth and acceptance of our solutions will depend on the perceived authenticity of online word of mouth and effectiveness of using online word of mouth to influence purchase decisions, both online and offline, and better understand consumer preferences regarding products and services. The existence of fraudulent reviews may call into question the authenticity of online word of mouth. We also depend on the continued growth of the social web and adoption of mobile devices, among other factors. If any of these factors are not realized, then the market for social commerce solutions may not develop as we expect, or it may develop more slowly than we expect, either of which would significantly harm our business and operating results.

The market in which we participate is fragmented, rapidly evolving and highly competitive, and we may be unable to compete successfully with our current or future competitors.

The market for social commerce solutions is highly competitive. The competitive dynamics of our market are unpredictable because it is at an early stage of development, rapidly evolving, fragmented and subject to potential disruption by new technological innovations.

Our main competition is from traditional marketing and advertising programs used by businesses that remain hesitant to embrace social commerce solutions such as Ratings & Reviews. Additionally, some businesses have developed, or may develop in the future, social commerce solutions internally. These businesses may consider their internal solutions adequate, even if our solutions are superior.

We have several direct and indirect competitors that provide third-party social commerce solutions, including but not limited to companies like Pluck, Reevoo, Gigya and Viewpoints. Additionally, we face potential competition from participants in adjacent markets that may enter our markets by leveraging related technologies and partnering with other companies.

We may also face competition from companies entering our market, including large Internet companies like Google, Inc. and Facebook, Inc., which could expand their platforms or acquire a competitor. While these companies do not currently focus on our market, they have significantly greater financial resources and, in the case of Google, a longer operating history. They may be able to devote greater resources to the development and improvement of their services than we can and, as a result, they may be able to respond more quickly to technological changes and clients’ changing needs. Because our market is changing rapidly, it is possible that new entrants, especially those with substantial resources, more efficient operating models, more rapid product development cycles or lower marketing costs, could introduce new solutions that disrupt the manner in which businesses use online word of mouth and engage with consumers online to address the needs of our clients and potential clients. Our business and operating results could be harmed if any such disruption occurs.

We believe we compete primarily on the basis of product breadth and functionality, scope, quality and breadth of client base, amount and quality of content, service, price, reputation and the efficiency of our operating model. Our competitors or potential competitors may adopt certain aspects of our business model, which could reduce our ability to differentiate our solutions. As market dynamics change, or as new and existing competitors introduce more competitive pricing models or new or disruptive technologies, or as clients develop internal solutions for their social commerce needs, we may be unable to renew our agreements with existing clients or attract new clients at the same price or based on the same pricing model as previously used. As a result, we may be required to change our pricing model, offer price incentives or reduce our prices in response to competitive pressures, which could harm our revenue, profitability and operating results. Moreover, many software vendors could bundle competitive products or services or offer them at a low price as part of a larger product sale. In addition, some competitors may offer software that addresses one or a limited number of strategic social commerce functions at lower prices or with greater depth than our solutions. As a result, our competitors might be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards or client requirements. For all of these reasons, we may not be able to compete successfully against our current and future competitors.

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Our quarterly financial results are subject to fluctuations; as a result, we could fail to meet or exceed expectations of analysts or investors, which could cause our stock price to decline.

Our revenue, expenses, operating results and cash flows have fluctuated from quarter to quarter in the past and are likely to continue to do so in the future. These fluctuations are due to, or may in the future result from, many factors, some of which are outside of our control, including:

• the timing differences between when we incur sales commissions, implementation costs and other client acquisition costs associated with new solutions sales and when we generate revenue from these sales, particularly related to larger sales to new clients;

• our ability to sell additional solutions to existing clients and to add new clients, in multiple regions around the world, particularly in the United States and Europe, which has fluctuated and is likely to continue to fluctuate, due to the effectiveness of our sales execution, economic conditions and other factors affecting our sales in each of these regions;

• our ability, and the ability of our clients, to timely implement our solutions;

• the amount, timing and effectiveness of our product development investments and related expenses and delays in generating revenue from these new solutions;

• our ability to adjust our cost structure, particularly our personnel costs, in response to reductions in revenue;

• the cyclical and discretionary nature of marketing and advertising spending, especially spending on social commerce solutions;

• seasonal variations and unpredictability in our customers’ advertising budgets;

• the amount and timing of operating expenses and capital expenditures related to the expansion of our operations and infrastructure and client acquisition;

• our failure to achieve the growth rate that was anticipated by us in setting our operating and capital expense budgets;

• changes in the active enterprise client retention rate, which has ranged on a year-to-year basis from 88.3% to 89.7% for the fiscal years 2010 through 2012 and was 88.3% for the twelve months ended January 31, 2013;

• the timing and success of new solutions, product and service offerings and pricing policies by us or our competitors or any other changes in the competitive dynamics of our industry;

• the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill or intangible assets from acquired companies, including in connection with our acquisitions of PowerReviews and Longboard Media;

• unforeseen litigation costs and related settlement costs, particularly those related to intellectual property infringement and our obligation to fulfill related client indemnification obligations and regulatory investigations or restructuring activities, including settlement costs and regulatory penalties assessed related to government enforcement actions;

• our ability to accurately estimate state and local sales tax obligations and to collect such actual amounts from our customers;

• changes in currency exchange rates and associated costs of hedging to manage foreign currency fluctuations; and

• the adoption of new laws or regulations, or interpretations of existing laws or regulations, that restrict, or increase the costs of, providing social commerce solutions or using the Internet as a medium for communications and commerce.

We offer our social commerce solutions primarily through subscription agreements and generally recognize revenue ratably over the related subscription period, which is typically one year, while revenue from our media services is generally recognized in the month services are provided. As a result of both types of arrangements, revenue attributable to a contract signed in a particular quarter will not be fully and immediately recognized in the quarter in which the contract is signed. Because we incur most costs associated with generating client contracts at the time of sale, we may not recognize revenue in the same period in which we incur the related costs of sale. Timing differences of this nature could cause our margins and our operating income or losses to fluctuate significantly from quarter to quarter, and such fluctuations may be more pronounced in quarters in which we experience a change in the mix of new clients as a percentage of total clients.

Typically, a significant percentage of our bookings occur in the last few weeks of a quarter. Accordingly, a market disruption or other event outside of our control that occurred toward the end of a quarter could have a disproportionate impact on us and could cause us to substantially miss our forecasted results for that quarter.

Fluctuations in our quarterly operating results may lead analysts to change their long-term model for valuing our common stock, cause us to face short-term liquidity issues, impact our ability to retain or attract key personnel or cause other unanticipated issues, all of which could cause our stock price to decline. As a result of the potential variations in our quarterly revenue and operating results, we believe that quarter-to-quarter comparisons of our revenue and operating results may not be meaningful, and the results of any one quarter should not be relied upon as an indication of future performance.

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Our business depends substantially on renewing agreements with existing clients and selling additional solutions to them. Any decline in our client renewals or expansions would likely harm our future operating results, especially if we are unable to recognize sufficient revenue to offset related client acquisition costs prior to such termination or cancellation of our client agreements.

In order for us to improve our operating results, it is important that our clients renew their agreements with us when the initial term expires and also purchase additional solutions from us. We offer our social commerce solutions primarily through subscription agreements and generally recognize revenue ratably over the related subscription period, which is typically one year. Our clients have no renewal obligation after their initial term expires, and we cannot assure you that we will be able to renew agreements with our clients at the same or higher contract value. Moreover, under specific circumstances, our clients may have the right to cancel their agreements with us before they expire, for example, in the event of an uncured breach by us. Similarly, our contracts with our media clients generally do not include long-term obligations requiring them to purchase our services and are often cancelable upon short or no notice and without penalty. If our clients do not renew their agreements, renew on less favorable terms or fail to purchase additional solutions, our revenue may decline, and our operating results would likely be harmed.

For fiscal years, 2011, 2012 and the 12 months ended January 31, 2013, our active enterprise client retention rates on a year-to-year basis were 89.7%, 89.0% and 88.3%, respectively. Our retention rates have declined in the past and may decline in the future due to a variety of factors, including:

• the availability, price, performance and functionality of our solutions and competing products and services;

• our ability to demonstrate to new clients the value of our solutions within the initial contract term, particularly if we are unable to introduce planned solutions innovation;

• poor performance or discontinuation of our clients’ brands;

• changes in our clients’ marketing or advertising strategies which can be cyclical, reflecting overall economic conditions as well as budgeting and discretionary buying patterns;

• the timing and quality of ratings and reviews posted to our clients’ websites and the existence of negative reviews;

• reductions in our clients’ spending levels;

• consolidation in our client base;

• the development by our clients of internal solutions for their social commerce needs; and

• the effects of economic downturns and global economic conditions.

We incur most of our client acquisition costs at the time of sale. Depending upon the scope of the client’s needs, these costs can be significant. In certain cases, clients may have the right to terminate or cancel agreements with us if we fail to maintain service level requirements or we are otherwise in breach under the client agreements. If a client does not renew or cancels its agreement with us, we may not recognize sufficient revenue from that client prior to the termination or cancellation to offset the acquisition costs associated with that client. If the cost to acquire clients is greater than the revenue we generate over time from those clients, our business and operating results will be harmed.

In addition, our costs associated with maintaining and increasing revenue from existing clients may be lower than costs associated with generating revenue from new clients. Therefore, the loss of recurring revenue or a reduction in the rate of revenue increase from our existing clients, even if offset by an increase in revenue from new clients, could have a material adverse effect on our operating results.

We face risks associated with our recent acquisitions of PowerReviews and Longboard Media that may adversely impact our operating results.

In June 2012, we acquired PowerReviews, a provider of social commerce solutions based in San Francisco, California, and in November 2012, we acquired Longboard Media, a full service media network for retailers, shopping publishers and advertisers based in San Francisco, California. These were our first two acquisitions. We may not successfully evaluate, utilize or integrate the acquired products, technologies or personnel, or accurately forecast the financial impact of the acquisitions, including accounting charges or the impact on our existing business. For example, customers of Bazaarvoice and PowerReviews may not continue to use Bazaarvoice or PowerReviews to the same extent as they would have if PowerReviews had remained an independent company, or they may cancel existing agreements. The acquisition of Longboard Media has provided us with a new line of business, and the entry into a new line of business in which we are inexperienced may result in unforeseen operating difficulties and expenditures. External factors, such as competition from companies with greater resources and experience and our clients’ willingness to purchase new and different services from us, may also limit our ability to take full advantage of the business opportunities available to us as we expand this new line of business. Accordingly, we may not realize the potential benefits of the acquisitions. In addition to these risks, the integration of each of PowerReviews and Longboard Media into our company will be a time-consuming and expensive process and will require us to bear ongoing costs associated with maintaining and supporting the existing technology platforms of the acquired companies. We may lose key employees from each of PowerReviews and Longboard Media as a result of the acquisitions, which would increase our costs and

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challenges in supporting the acquired technology. We may invest significant time and resources, including our management’s time and attention that would otherwise be available for ongoing development of our existing business. If we are not able to successfully implement the new line of business, if our integration efforts are not successful, if we do not estimate associated costs accurately or if we cannot effectively manage costs, we may not realize anticipated synergies or other benefits of the acquisitions, or it may take longer to realize these benefits than we currently expect, either of which could materially harm our business or results of operations.

After the completion of our acquisition of PowerReviews, the Department of Justice, Antitrust Division (“DOJ”) filed a complaint against us with the U.S. District Court for the Northern District of California, San Francisco Division, alleging that our acquisition of PowerReviews violates Section 7 of the Clayton Act, 15 U.S.C. Section 18 and seeking the Company’s divestiture of assets sufficient to create a competing business that can replace the competitive significance of PowerReviews in the marketplace. The lawsuit could be lengthy, could result in material legal fees and associated costs, and require considerable time and attention of our management. Further, we could be required to divest part, or all, of PowerReviews’ operations and assets. As a result, this lawsuit could have a material adverse effect on our operating results and could materially impact our business strategy going forward.

Our actual results may differ significantly from any guidance that we may issue in the future and the consensus expectations of research analysts.

From time to time, we may release earnings guidance or other forward-looking statements in our earnings releases, earnings conference calls or otherwise regarding our future performance that represent our management’s estimates as of the date of release. If given, this guidance will be based on forecasts prepared by our management. The principal reason that we may release guidance is to provide a basis for our management to discuss our business outlook with analysts and investors. Guidance is necessarily speculative in nature. The speculative nature of any guidance is further exacerbated by the rapidly evolving nature and uncertain size of the market for social commerce solutions, as well as the unpredictability of future general economic and financial conditions. As a result, some or all of the assumptions of any future guidance that we furnish may not materialize or may vary significantly from actual future results. Any failure to meet guidance or analysts’ expectations could have a material adverse effect on the trading price or volume of our stock.

If we cannot efficiently implement our solutions for clients, we may be delayed in generating revenue.

In general, implementation of our solutions may require lengthy and significant work. We generally incur sales and marketing expenses related to the commissions owed to our sales representatives and make upfront investments in technology and personnel to support the engagements before we begin recognizing revenue from client contracts. We do not control our clients’ implementation schedule. As a result, as we have experienced in the past, if our clients do not allocate internal resources necessary to meet their implementation responsibilities or if we face unanticipated implementation difficulties, the implementation may be delayed and/or cancelled. Further, in the past, our implementation capacity has at times constrained our ability to successfully and timely implement our solutions for our clients, particularly during periods of high demand. If the client implementation process is not executed successfully or if execution is delayed, whether due to our clients’ or our capacity constraints, we could incur significant costs prior to generating revenue, and our relationships with some of our clients may be adversely affected. In addition, competitors with more efficient operating models with lower implementation costs could penetrate our client relationships.

Our management team has a limited history of working together and may not be able to execute our business plan. Changes to our management team may cause uncertainty regarding the future of our business and may adversely impact employee hiring and retention, our stock price, and our revenue, operating results, and financial condition.

Our management team has worked together for only a limited period of time and has a limited track record of executing our business plan as a team. Most of our executives have limited or no experience in managing publicly traded companies or companies of our size. In addition, we have recently filled a number of positions in our senior management and finance and accounting staff, which changes include the recent appointments of our President and Chief Executive Officer, and our new Chief Financial Officer. Accordingly, certain key personnel have only recently assumed the duties and responsibilities they are now performing, and it is difficult to predict whether our management team, individually and collectively, will be effective in operating our business. These changes may cause speculation and uncertainty regarding our future business strategy and direction and may cause or result in:

• disruption of our business or distraction of our employees and management;

• difficulty in recruiting, hiring, motivating, and retaining talented and skilled personnel;

• stock price volatility; and

• difficulty in negotiating, maintaining, or consummating business or strategic relationships or transactions.

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If we are unable to mitigate these or other potential risks, our revenue, operating results and financial condition may be adversely impacted.

Our business depends on retaining and attracting qualified management and operating personnel.

Our success depends in large part on our ability to retain and attract high-quality management and operating personnel. Our business plan was developed in large part by our executive officers, and its implementation requires their skills and knowledge. We do not maintain key person life insurance policies on any of our employees. We may not be able to offset the impact on our business of the loss of the services of one or more of our executive officers or key employees. Our business also requires skilled technical and sales personnel, who are in high demand and are often subject to competing offers. As we expand into new vertical and geographic markets, we will require personnel with expertise in these new areas. Competition for qualified employees is intense in our industry and particularly in Austin, Texas, where most of our employees are based. We have experienced increased employee turnover since our initial public offering and have incurred additional expenses as a result. An inability to retain, attract, relocate and motivate additional highly skilled employees required for the operation and planned expansion of our business, could harm our operating results and impair our ability to grow. To retain and attract key personnel, we use various measures, including an equity incentive program and incentive bonuses for executive officers and other key employees. These measures may not be sufficient to retain and attract the personnel we require to operate our business effectively. A significant portion of the stock options held by our employees have exercise prices that are higher than the current market price for our common stock. As a result, such stock options may no longer provide additional incentive for our employees to remain employed by us. In addition, in making employment decisions, particularly in the software industry, job candidates often consider the value of the stock options they are to receive in connection with their employment. Significant volatility in the price of our stock may, therefore, adversely affect our ability to retain and attract key employees.

Our growth could strain our personnel, technology and infrastructure resources, and if we are unable to effectively manage our growth, our operating results may suffer.

Since our inception, we have experienced rapid growth, which has increased the complexity of our operations. As our operations have expanded, we have grown from 70 employees at April 30, 2007 to 1,142 employees at January 31, 2013, consisting of 796 full-time employees and 346 part-time content moderators. We have increased the size of our client base from 32 active clients at April 30, 2007 to 1,179 active enterprise clients at January 31, 2013, including approximately 300 active enterprise clients plus approximately 800 active network clients added to our business as a result of our acquisition of PowerReviews on June 12, 2012. The rapid growth and increasing complexity have demanded, and will continue to demand, substantial resources and attention from our management, most of whom have limited experience in managing a business of our size and complexity. We expect to continue to hire more employees in the future as we grow our business. To manage the expected growth of our operations and personnel and to support financial reporting requirements as a public company, we will need to continue to improve our operational, financial, technology and management controls and our reporting systems and procedures. Further, to accommodate our expected growth we must continually improve and maintain our technology, systems and network infrastructure. Our current and planned personnel, systems, procedures and controls may not be adequate to support our future operations. Our inability to expand our personnel and operations in an efficient manner could result in difficulty in acquiring new clients or retaining existing clients, declines in quality or client satisfaction, increases in expenses relative to our revenue and challenges in developing and introducing new solutions, any of which could adversely affect our operating results.

Because we recognize revenue for our solutions ratably over the term of our client agreements, decreases in the revenue recognizable under contracts for new active clients will not be fully and immediately reflected in our operating results.

We offer our social commerce solutions primarily through subscription agreements and generally recognize revenue ratably over the related subscription period, which is typically one year. As a result, some portion of the revenue we report in each quarter is revenue from contracts entered into during prior quarters. Consequently, a decline in the revenue recognizable under contracts for new active clients signed in any quarter or a decline in the growth rate of revenue recognizable under contracts signed in any quarter will not be fully and immediately reflected in the revenue of that quarter and would negatively affect our revenue in future quarters. In addition, we may be unable to adjust our cost structure rapidly, or at all, to take account of this reduced revenue.

Our sales cycle can be long and unpredictable and require considerable time and expense, which may cause our operating results to fluctuate. Additionally, if we do not continue to identify and qualify new customers, our ability to grow our revenue may be adversely effected.

The sales cycle for our solutions, from initial contact with a potential client to contract execution and implementation, varies widely by client and solution. Some of our clients undertake a significant evaluation process that has in the past resulted in a lengthy sales cycle, typically three to 12 months. We have no assurance that the substantial time and money spent on our sales efforts will produce any sales. If sales expected from a specific client for a particular quarter are not realized in that quarter or at all, our results could fall short of public expectations and our business, operating results and financial condition could be adversely affected.

We have recently refocused our sales efforts on generating business from new customers. Our future success, particularly our ability to grow revenue, will depend largely upon the success of this effort. Our sales force and marketing team must continue to generate new sales leads. When we “qualify” a lead, that lead becomes part of our sales “pipeline.” If we do not continue to add potential new customers to our pipeline there could eventually be a negative impact on our ability to grow our revenue in the future.

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The average sales price of our solutions may decrease, which may adversely affect our ability to achieve and maintain profitability.

The average sales price of our solutions may decline for a variety of reasons, including competitive pricing pressures in anticipation of the introduction of new solutions or technologies. In addition, because the market for our social commerce solutions is new and unproven and because our business model is evolving, we may not be able to achieve and sustain a level of demand and market acceptance sufficient for us to continue to maintain the current average sales price for our solutions. Furthermore, the composition of our clients may change in a manner that makes it more difficult to maintain such prices. Any failure to maintain our prices could have an adverse effect on our business, results of operations and financial condition.

If we are unable to maintain or expand our direct sales and marketing capabilities, we may not be able to generate anticipated revenue.

We rely primarily on our direct sales force to sell our solutions. Our solutions require a sophisticated sales force. We are upgrading and expanding our sales team in order to increase revenue from new and existing clients and to further penetrate our existing markets and expand into new markets. We are hiring new sales leaders, and are restructuring our sales organization in order to scale our sales operations to grow our revenue. This restructuring may not have the desired effect of expanding our business and generating anticipated revenue. Additionally, we are hiring a number of new sales personnel to replace terminated personnel and to grow our sales team in both existing and new markets. These efforts may initially be disruptive to our sales process.

Our sales force upgrade and expansion may not have the desired effect of expanding our business and generating anticipated revenue. Competition for qualified sales personnel is intense, and there can be no assurance that we will be able to retain our existing sales personnel or attract, integrate or retain sufficient highly qualified sales personnel, which could adversely affect our revenue growth. Many of the companies with which we compete for experienced personnel have greater resources than we have. If any of our sales representatives were to leave us and join one of our competitors, we may be unable to prevent such sales representatives from helping competitors to solicit business from our existing clients, which could adversely affect our revenue.

In addition, new sales hires require training and typically take several months to achieve productivity, if at all. For internal planning purposes, we assume that it will take significant time before a newly hired sales representative is fully trained and productive in selling our solutions. This amount of time may be longer for sales personnel focused on new geographies or new verticals. As a result, the cost of hiring and carrying new representatives cannot be offset by the revenue they produce for a significant period of time. Furthermore, because of the length of our sales training period, we often cannot determine if a sales representative will succeed until after he or she has been employed for several months or longer. If we experience high turnover in our sales force, or if we cannot reliably develop and grow a successful sales team, our revenue growth may be adversely affected.

If we are not able to successfully leverage data we and our clients collect and manage through our solutions and services, we may not be able to increase our revenue through our media services, analytics and other data solutions.

Our ability to optimize the placement and scheduling of advertisements for our media clients and to grow our revenue through analytics and other data solutions depends on our ability to successfully leverage data that we and our clients collect and manage through the use of our solutions and services. Our ability to successfully leverage such data, in turn, depends on our ability to collect and obtain rights to utilize such data in our solutions and services and to maintain and grow our network of clients. We currently employ cookies, which are small files of non-personalized information placed on an Internet user’s computer, on a limited basis with respect to our social commerce solutions and more broadly with respect to our media services. The cookies are used to collect information related to the user, such as the user’s Internet Protocol, or IP, address, demographic information and history of the user’s interactions with our clients and any advertisements we deliver. If we are unable to effectively utilize or introduce cookies more broadly, our ability to collect such data could be impaired.

Additionally, our ability to both collect and utilize data may be affected by a number of factors outside of our control, including increased government regulation of the collection of information concerning consumer behavior on the Internet and the increased use of features that allow website visitors to modify their settings to prevent or delete cookies and to sweep all cookies from their computers. Further, we currently do not own the data collected through the use of our solutions and services but currently license the data from our clients for limited aggregation purposes. If our clients decide not to allow us to collect the data or if we are not able to obtain sufficient rights to the data, we may not be able to utilize it in our solutions and services. Finally, in order to obtain the critical mass of data necessary for our analytics and other data solutions to have value for our clients, we will need to maintain and grow our client base. Currently, a substantial amount of the data to which we have access is collected by a small number of our clients. Consequently, the loss of a single client could have a disproportionate impact on the data that is available to us. Any of these limitations on our ability to successfully leverage data could have a material adverse effect on our ability to increase our revenue through media services, analytics and other data solutions and could harm our future operating results.

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We derive a substantial portion of our revenue from a limited number of our solutions. If we are unable to maintain demand for these solutions or diversify our revenue sources by successfully developing and introducing new or enhanced solutions, we could lose existing clients or fail to attract new clients and our business could be harmed.

Ratings & Reviews was our first social commerce solution and still remains the core element of our technology platform today. If we are unable to continue developing enhanced features for this solution to maintain demand or to diversify our revenue base by increasing demand for our other solutions and successfully developing and introducing new solutions either by internal development or acquisition, our operating results could be negatively impacted. We are currently modifying our software architecture to be able to develop and implement new solutions more efficiently and cost effectively. We are also currently investing significant amounts in research and development in connection with our efforts to leverage data that we and our clients collect and manage through the use of our solutions. Improving our architecture and developing and delivering new or upgraded solutions may require us to make substantial investments, and we have no assurance that such new or upgraded architecture solutions will generate sufficient revenue to offset their costs. If we are unable to efficiently develop, license or acquire such new or upgraded solutions on a timely and cost-effective basis, or if such solutions are not effectively brought to market, are not appropriately timed with market opportunity or do not achieve market acceptance, we could lose existing clients or fail to attract new clients, and our business and operating results could be materially adversely affected.

In addition, we must continuously modify and enhance our solutions to keep pace with rapid changes in the social web and Internet-related hardware, software communication, browser, database and social commerce technologies. If we are unable to respond in a timely and cost-effective manner to rapid technological developments, our solutions could become less marketable and less competitive or become obsolete, and our operating results could be negatively affected.

Our customer relationships and overall business will suffer if we encounter significant problems migrating customers to our next-generation technology platform, or if the new platform does not meet expectations.

We have begun implementation of Conversations 2013, our next-generation social commerce technology platform, and we intend to migrate all of our customers to this new technology platform over time. We have limited experience migrating customers from one platform to another. Given the complexity and significance of this transition, including the amount of customer data within our systems that will need to be accessed and migrated, our customer relationships, our reputation, and our overall business could be severely damaged if these migrations go poorly. In addition, we expect to incur additional expenses as a result of our near term plans to run dual technology platforms for several quarters as we commence the launch of Conversations 2013 while maintaining our existing technology platform, and if we experience any delays or technical problems as a result of the launch of and migration to Conversations 2013, we may incur such expenses for a much longer period of time than anticipated. Similarly, even if the migrations go smoothly, our business operations and customer relationships will be at high risk if the new platform does not meet our performance expectations, or those of our customers. This could harm our business in numerous ways including, without limitation, a loss of revenue, lost customer contracts, and damage to our reputation.

Our long-term success depends, in part, on our ability to maintain and expand our operations outside of the United States and, as a result, our business is susceptible to risks associated with international operations.

As our operations have expanded, we have established and currently maintain offices in the United States, the United Kingdom, Australia, France, Germany and Sweden. We have limited experience in operating in foreign jurisdictions outside the United States and are making significant investments to build our international operations. Managing a global organization is difficult, time-consuming and expensive, and any international expansion efforts that we may undertake may not be successful. In addition, conducting international operations subjects us to risks, including the following:

• the cost and resources required to localize our solutions;

• competition with companies that understand the local market better than we do or who have pre-existing relationships with potential clients in those markets;

• legal uncertainty regarding the application of unique local laws to social commerce solutions or a lack of clear precedent of applicable law;

• lack of familiarity with and the burden of complying with a wide variety of other foreign laws, legal standards and foreign regulatory requirements, which are subject to unexpected changes;

• difficulties in managing and staffing international operations;

• fluctuations in currency exchange rates;

• potentially adverse tax consequences, including the complexities of foreign value added tax systems and restrictions on the repatriation of earnings;

• increased financial accounting and reporting burdens and complexities and difficulties in implementing and maintaining adequate internal controls;

• political, social and economic instability abroad, terrorist attacks and security concerns in general;

• reduced or varied protection for intellectual property rights in some countries; and

• higher telecommunications and Internet service provider costs.

Operating in international markets also requires significant management attention and financial resources. The investment and additional resources required to establish operations and manage growth in other countries may not produce desired levels of revenue or profitability.

Unfavorable conditions in the market for social commerce solutions or the global economy or reductions in marketing spending, particularly in the online retail market, could limit our ability to grow our business and negatively affect our operating results.

Our operating results may vary based on the impact on us or our clients of changes in the market for social commerce solutions or the global economy. In addition, the revenue growth and potential profitability of our business depends on marketing spending by companies in the markets we serve. As of January 31, 2013, a majority of our clients were online retailers. To the extent that weak

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economic conditions cause our clients and potential clients to freeze or reduce their marketing budgets, particularly in the online retail market, demand for our solutions may be negatively affected. Historically, economic downturns have resulted in overall reductions in marketing spending. If economic conditions deteriorate or do not materially improve, our clients and potential clients may elect to decrease their marketing budgets by deferring or reconsidering product purchases, which would limit our ability to grow our business and negatively affect our operating results.

If we are unable to increase our penetration in our principal existing markets and expand into additional vertical markets, we will be unable to grow our business and increase revenue.

We currently market our solutions to a variety of industries, including the retail, consumer products, travel and leisure, technology, telecommunications, financial services, healthcare and automotive industries. We believe our future growth depends not only on increasing our penetration into the principal markets in which our solutions are currently used but also on identifying and expanding the number of industries, communities and markets that use or could use our solutions. Efforts to offer our solutions beyond our current markets may divert management resources from existing operations and require us to commit significant financial resources, either of which could significantly impair our operating results. In addition, some markets have unique and complex regulatory requirements that may make it more difficult or costly for us to market, sell or implement our solutions in those markets. Moreover, our solutions may not achieve market acceptance in new markets, and our efforts to expand beyond our existing markets may not generate additional revenue or be profitable. Our inability to further penetrate our existing markets or our inability to identify additional markets and achieve acceptance of our solutions in these additional markets could adversely affect our business, results of operations and financial condition.

Our growth depends in part on the success of our relationships with third parties for the delivery and development of, and implementation support for, our solutions and services.

We currently depend on, and intend to pursue additional relationships with, various third parties related to product development, including technology and service providers and social media platforms, and our media services. Identifying, negotiating and documenting these relationships requires significant time and resources, as does integrating our solutions with third-party technologies. In some cases, we do not have formal written agreements with our development partners. Even when we have written agreements, they are typically non-exclusive and do not prohibit our development partners from working with our competitors or from offering competing services. Our competitors may be effective in providing incentives to third parties to favor their products or services.

Specifically, we outsource some of our product development, quality assurance and technology operations to two third-party contractors located in the Ukraine and Costa Rica. We also rely on a third-party relationship to assist with client implementation support. We believe that supplementing our product development and implementation support activities with our outsourced third-party contractors enhances the efficiency and cost-effectiveness of these activities. If we experience problems with our third-party contractors or the costs charged by our contractors increases, we may not be able to develop new solutions or enhance existing solutions or meet our clients’ implementation support needs in an alternate manner that is equally or more efficient and cost-effective.

We integrate certain of our solutions directly with Facebook’s social media platform. We currently rely on Facebook’s cooperation in order to integrate our solutions with Facebook’s platform, and we do not have a formal, written agreement with Facebook. There is no assurance that Facebook will continue to cooperate with us. Changes in Facebook’s technology or terms of use may inhibit or restrict us from continuing to integrate our solutions with Facebook’s platform. If Facebook does not continue to cooperate with us or if Facebook changes their technology or terms of use in ways that inhibit, restrict or increase the costs of the integration of our solutions with Facebook, our business could be harmed.

We use DoubleClick’s ad-serving platform to deliver and monitor ads for our media management services. There can be no assurance that DoubleClick, which is owned by Google, will continue providing these services, that our agreement with DoubleClick will be extended or renewed upon expiration, that we will be able to extend or renew our agreement with DoubleClick on terms and conditions favorable to us or that we could identify another alternative vendor to take its place. Our agreement with DoubleClick also allows DoubleClick to terminate our relationship before the expiration of the agreement on the occurrence of certain events, including material breach of the agreement by us, and to suspend provision of the services if DoubleClick determines that our use of its service violates certain terms of the agreement.

We anticipate that we will continue to depend on these and other third-party relationships in order to grow our business. If we are unsuccessful in maintaining existing and establishing new relationships with third parties, our ability to efficiently develop and implement new solutions could be impaired, and our competitive position or our operating results could suffer. Even if we are successful, these relationships may not result in increased revenue.

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We currently rely on a small number of third-party service providers to host and deliver a significant portion of our solutions, and any interruptions or delays in services from these third parties could impair the delivery of our solutions and harm our business.

We host our solutions and serve our clients primarily from a third-party data center facility located in Texas. We also utilize third-party services that deploy data centers worldwide. We do not control the operation of any of the third-party data center facilities we use. These facilities may be subject to break-ins, computer viruses, denial-of-service attacks, sabotage, acts of vandalism and other misconduct. They are also vulnerable to damage or interruption from power loss, telecommunications failures, fires, floods, earthquakes, hurricanes, tornadoes and similar events. As a result, we may in the future experience website disruptions, outages and other performance problems. Despite our efforts, the occurrence of any of these events, a decision by our third-party service providers to close their data center facilities without adequate notice or other unanticipated problems could result in loss of data as well as a significant interruption in the offering of our solutions and harm to our reputation and brand.

Additionally, our third-party data center facility agreements are of limited durations, and our third-party data center facilities have no obligation to renew their agreements with us on commercially reasonable terms, or at all. If we are unable to renew our agreements with these facilities on commercially reasonable terms, we may experience delays in the provisioning of our solutions until an agreement with another data center facility can be arranged. This shift to alternate data centers could take more than 24 hours depending on the nature of the event, which could cause significant interruptions in service and adversely affect our business and reputation.

We also depend on third-party Internet-hosting providers and continuous and uninterrupted access to the Internet through third-party bandwidth providers to operate our business. If we lose the services of one or more of our Internet-hosting or bandwidth providers for any reason or if their services are disrupted, for example due to viruses or “denial-of-service” or other attacks on their systems, or due to power loss, telecommunications failures, fires, floods, earthquakes, hurricanes, tornadoes or similar events, we could experience disruption in our ability to offer our solutions or we could be required to retain the services of replacement providers, which could increase our operating costs and harm our business and reputation.

Any errors, defects, disruptions or other performance problems with our solutions could harm our reputation and may damage our clients’ businesses. Interruptions in our ability to offer our solutions would likely reduce our revenue, could cause our clients to cease using our solutions and could adversely affect our retention rates. In addition, some of our client agreements require us to issue credits for downtime in excess of certain targets, and in some instances give our clients the ability to terminate the agreements. Our business and results of operations would be harmed if our current and potential clients believe our solutions are unreliable.

Unfavorable changes in evolving government regulation and taxation of the Internet and online communications and social commerce solutions could harm our business and results of operations.

The future success of our business depends upon the continued use of the Internet as a primary medium for communications and commerce. As the use of the Internet continues to evolve, increasing regulation by federal, state or foreign governments becomes more likely. Federal, state or foreign government bodies or agencies have in the past adopted, and may in the future adopt, laws or regulations affecting data privacy, the solicitation, collection, processing or use of personal or consumer information, truth-in-advertising, consumer protection and the use of the Internet as a commercial medium and the market for social commerce solutions. There is also uncertainty as to how some existing laws governing issues such as sales taxes, libel and personal privacy apply to the Internet. In addition, government agencies or private organizations may begin to impose taxes, fees or other charges for accessing the Internet. Any new regulations or legislation or new interpretations of existing regulations or legislation restricting Internet commerce or communications or imposing greater fees for Internet use could result in a decline in the use of the Internet as a medium for commerce and communications, diminish the viability of Internet solutions generally, and reduce the demand for our solutions. Additionally, if we are required to comply with new regulations or legislation or new interpretations of existing regulations or legislation, this compliance could cause us to incur additional expenses, make it more difficult to conduct our business or require us to alter our business model. Any of these outcomes could have a material adverse effect on our business, financial condition or results of operations.

Public scrutiny of Internet privacy issues may result in increased regulation and different industry standards, which could require us to incur significant expenses in order to comply with such regulations or deter or prevent us from providing our products and solutions to clients, thereby harming our business.

As part of our business, we collect and store personal information. We expect our collection and storage of personal information to increase, primarily in connection with our efforts to expand our media services, analytics and other data solutions. The regulatory framework for privacy issues worldwide is currently in flux and is likely to remain so for the foreseeable future. Practices regarding the collection, use, storage, transmission and security of personal information by companies operating over the Internet have recently come under increased public scrutiny. The U.S. government, including the White House, the Federal Trade Commission and the Department of Commerce, are reviewing the need for greater regulation for the collection of information concerning consumer

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behavior on the Internet, including regulation aimed at restricting certain targeted advertising practices. The White House recently published a report calling for a consumer privacy Bill of Rights that could impact the collection of data on the Internet. Recently, the State of California and several other states have adopted privacy guidelines with respect to mobile applications. We will also face additional privacy issues as we expand into other international markets, as many nations have privacy protections more stringent than those in the United States. For example, the European Union is in the process of proposing reforms to its existing data protection legal framework, which may result in a greater compliance burden for companies with users in Europe. Various government and consumer agencies have also called for new regulation and changes in industry practices.

We have incurred, and will continue to incur, expenses to comply with privacy and security standards and protocols imposed by law, regulation, industry standards or contractual obligations. Increased domestic or international regulation of data utilization and distribution practices, including self-regulation, could require us to modify our operations and incur significant expense, which could have an adverse effect on our business, financial condition and results of operations. Our business, including our ability to operate and expand internationally, could be adversely affected if legislation or regulations are adopted, interpreted, or implemented in a manner that is inconsistent with our current or planned business practices and that require changes to these practices, the design of our solutions or our privacy policy.

If our security measures are breached or unauthorized access to consumer data is otherwise obtained, our solutions may be perceived as not being secure, clients may curtail or stop using our solutions, and we may incur significant liabilities.

Our operations involve the storage and transmission of confidential information, and security breaches could expose us to a risk of loss of this information, litigation, indemnity obligations to our clients and other liability. If our security measures are breached as a result of third-party action, employee error, malfeasance or otherwise, and, as a result, someone obtains unauthorized access to client and consumer data, including personally identifiable information regarding consumers, our reputation will be damaged, our business may suffer and we could incur significant liability. Because techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. If an actual or perceived breach of our security occurs, the market perception of the effectiveness of our security measures could be harmed and we could lose potential sales and existing clients.

We may be subject to claims that we violated intellectual property rights of others, which are extremely costly to defend and could require us to pay significant damages and limit our ability to operate.

Companies in the Internet and technology industries, and other patent, copyright and trademark holders, own large numbers of patents, copyrights, trademarks and trade secrets and frequently enter into litigation based on claims of infringement or other violations of intellectual property rights. We have received in the past, and expect to receive in the future, notices that claim we or our clients using our solutions have misappropriated or misused other parties’ intellectual property rights. There may be intellectual property rights held by others, including issued or pending patents, copyrights and trademarks, that cover significant aspects of our technologies, content, branding or business methods. Any intellectual property claim against us or against our clients requiring us to indemnify our clients, regardless of merit, could be time-consuming and expensive to settle or litigate and could divert our management’s attention and other resources. These claims also could subject us to significant liability for damages and could result in our having to stop using technology, content, branding or business methods found to be in violation of another party’s rights. In addition, some of our commercial agreements require us to indemnify the other party for third-party intellectual property infringement claims, which could increase the cost to us of an adverse ruling in such an action. We might be required or may opt to seek a license for rights to intellectual property held by others, which may not be available on commercially reasonable terms, or at all. Even if a license is available, we could be required to pay significant royalties, which would increase our operating expenses. We may also be required to develop alternative non-infringing technology, content, branding or business methods, which could require significant effort and expense and make us less competitive. If we cannot license or develop technology, content, branding or business methods for any allegedly infringing aspect of our business, we may be unable to compete effectively. Any of these results could harm our operating results.

If we do not adequately protect our intellectual property, our ability to compete could be impaired.

If we are unable to protect our intellectual property, our competitors could use our intellectual property to market products and services similar to ours and our ability to compete effectively would be impaired. To protect our intellectual property we rely on a combination of copyright, trademark, patent and trade secret laws, contractual provisions and technical measures. These protections may not be adequate to prevent our competitors from copying or reverse-engineering our technology and services to create similar offerings. The scope of patent protection, if any, we may obtain from our patent applications is difficult to predict and, if issued, our patents may be found invalid, unenforceable or of insufficient scope to prevent competitors from offering similar services. Our competitors may independently develop technologies that are substantially equivalent or superior to our technology. To protect our trade secrets and other proprietary information, we require employees, consultants, advisors, subcontractors and collaborators to enter into confidentiality agreements, and we maintain policies and procedures to limit access to our trade secrets and proprietary information. These agreements and the other actions we take may not provide meaningful protection for our trade secrets, know-how

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or other proprietary information from unauthorized use, misappropriation or disclosure. Existing copyright and patent laws may not provide adequate or meaningful protection in the event competitors independently develop technology, products or services similar to our solutions. Even if such laws provide protection, we may have insufficient resources to take the legal actions necessary to protect our interests.

Upon discovery of potential infringement of our intellectual property, we promptly take action we deem appropriate to protect our rights. Even if we do detect violations and decide to enforce our intellectual property rights, litigation may be necessary to enforce our rights, and any enforcement efforts we undertake could be time-consuming and expensive, could divert our management’s attention and may result in a court determining that our intellectual property rights are unenforceable. A failure to protect our intellectual property in a cost-effective and meaningful manner could have a material adverse effect on our ability to compete.

As of January 31, 2013, we had five issued U.S. patents, 20 pending U.S. non-provisional patent applications and three pending U.S. provisional patent applications. We cannot be certain that any additional patents will be issued with respect to our current or potential patent applications. Any current or future patents issued to us may be challenged, invalidated or circumvented, may not provide sufficiently broad protection or may not prove to be enforceable inactions against alleged infringers. Furthermore, effective patent, trademark, copyright and trade secret protection may not be available in every country in which our products are available over the Internet. In addition, the legal standards relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain and still evolving.

We face potential liability and expenses for legal claims based on online word of mouth and other third-party content that is enabled and delivered by our solutions and services. If we are required to pay damages or expenses in connection with these legal claims, our operating results and business may be harmed.

Our solutions enable our clients to collect and display user-generated content, in the form of online word of mouth, on their websites and other third-party websites. We are also involved in the syndication and moderation of such content and the delivery of other forms of third-party content in connection with our media services. Consequently, in connection with the operation of our business, we face potential liability based on a variety of theories, including fraud, defamation, negligence, copyright or trademark infringement or other legal theories based on the nature and syndication or moderation of this information, and under various laws, including the Lanham Act and the Copyright Act. In addition, it is also possible that consumers could make claims against us for losses incurred in reliance upon information enabled by our solutions, syndicated, moderated or delivered by us or displayed on our clients’ websites or social networks. These claims, whether brought in the United States, or abroad, could divert management time and attention away from our business and result in significant costs to investigate and defend, regardless of the merit of these claims. If we become subject to these or similar types of claims and are not successful in our defense, we may be forced to pay substantial damages. There is no guarantee that we will avoid future liability and potential expenses for legal claims based on the content of the materials that our solutions and services enable. Should the content enabled by our solutions and services violate the intellectual property rights of others or otherwise give rise to claims against us, we could be subject to substantial liability, which could have a negative impact on our business, revenue and financial condition.

Our use of open source and third-party technology could impose limitations on our ability to commercialize our solutions.

We use open source software in our solutions. Although we monitor our use of open source software closely, the terms of many open source licenses have not been interpreted by courts in or outside of the United States, and there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to market our solutions. We also incorporate certain third-party technologies into our solutions and may desire to incorporate additional third-party technologies in the future. Licenses to new third-party technology may not be available to us on commercially reasonable terms, or at all. We could be required to seek licenses from third parties in order to continue offering our solutions, to re-engineer our technology or to discontinue offering our solutions in the event re-engineering cannot be accomplished on a timely basis, any of which could adversely affect our business, operating results and financial condition.

Undetected errors or defects in our solutions could result in the loss of revenue, delayed market acceptance of our products or services or claims against us.

Our solutions are complex and frequently upgraded and may contain undetected errors, defects, failures or viruses, especially when first introduced or when new versions or enhancements are released. Our solutions and services may also be vulnerable to fraudulent acts by third-parties, including the posting of inauthentic reviews and click-through fraud, which occurs when an individual clicks on an ad displayed on a website or an automated system is used to create such clicks with the intent of generating the revenue share payment to the publisher rather than to view the underlying content. Despite testing, our solutions, or third-party products that we incorporate into our solutions, may contain undetected errors, defects, viruses or vulnerabilities that could, among other things:

• require us to make extensive changes to our solutions, which would increase our expenses;

• expose us to claims for damages;

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• require us to incur additional technical support costs;

• cause negative client or consumer reactions that could reduce future sales;

• generate negative publicity regarding us and our solutions; or

• result in clients electing not to renew their subscriptions for our solutions.

Any of these occurrences could have a material adverse effect upon our business, financial condition and results of operations.

We might require additional capital to support business growth, and this capital might not be available.

We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new solutions or enhance our existing solutions and platforms, enhance our operating infrastructure and acquire complementary businesses and technologies. Accordingly, we may need to engage in equity or debt financings to secure additional funds. For example, in July 2012, we completed a follow-on offering in which we sold and issued a total of approximately 3.6 million shares of our common stock. If we raise additional funds through further issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock, including shares of common stock sold in our initial public offering which was completed in February 2012, or our follow-on public offering, which was completed in July 2012. Any debt financing secured by us in the future would likely be senior to our common stock and could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. In addition, we may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly limited.

Our loan agreement contains operating and financial covenants that may restrict our business and financing activities and expose us to risks that could adversely affect our liquidity and financial condition.

On July 18, 2007, we entered into a loan and security agreement with a financial institution. As amended to date, the loan agreement provides for borrowings up to $30.0 million, subject to a borrowing formula, under a revolving line of credit, with a sublimit of $2.65 million for the issuance of corporate credit cards and letters of credit on our behalf. As of January 31, 2013, we had no borrowings and a $1.9 million standby letter of credit issued under our loan agreement. Any borrowings, letters of credit and credit card services pursuant to our loan agreement are secured by substantially all of our assets, including our intellectual property. Our loan agreement limits, among other things, our ability to:

• incur additional indebtedness or guarantee the obligations of other persons;

• make payments on additional indebtedness or make changes to certain agreements related to additional indebtedness;

• enter into hedging arrangements;

• create, incur or assume liens and other encumbrances;

• make loans and investments, including acquisitions;

• make capital expenditures;

• sell, lease, license or otherwise dispose of assets;

• store inventory and equipment with other persons;

• pay dividends or make distributions on, or purchase or redeem, our capital stock;

• consolidate or merge with or into other entities;

• undergo a change in control;

• engage in new or different lines of business; or

• enter into transactions with affiliates.

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Our loan agreement also contains numerous affirmative covenants, including covenants regarding compliance with applicable laws and regulations, reporting, payment of taxes and other obligations, maintenance of insurance coverage, maintenance of bank and investment accounts with the financial institution and its affiliates, registration of intellectual property rights, and certain third-party consents and waivers. The operating and other restrictions and covenants in our loan agreement, and in any future financing arrangements that we may enter into, may restrict our ability to finance our operations, engage in certain business activities, or expand or fully pursue our business strategies, or otherwise limit our discretion to manage our business. Our ability to comply with these restrictions and covenants may be affected by events beyond our control, and we may not be able to meet those restrictions and covenants.

Our loan agreement contains events of default, which include, among others, non-payment defaults, covenant defaults, material adverse change defaults, bankruptcy and insolvency defaults, material judgment and settlement defaults, cross-defaults to certain other material agreements and defaults related to inaccuracy of representations and warranties made by us. An event of default under our loan agreement or any future financing arrangements could result in the termination of commitments to extend further credit, cause any outstanding indebtedness under our loan agreement or under any future financing arrangements to become immediately due and payable and permit our lender to exercise remedies with respect to all of the collateral securing the loans. Accordingly, an event of default could have an adverse effect on our access to capital, liquidity and general financial condition.

If Internet search engines’ methodologies are modified, our search engine optimization (“SEO”) capability could be harmed.

In connection with SEO, capabilities that we provide our clients, including our SEO solution, we depend in part on various Internet search engines, such as Google and Bing, to direct a significant amount of traffic to our clients’ websites. Our ability to influence the number of visitors directed to our clients’ websites through search engines is not entirely within our control. For example, search engines frequently revise their algorithms in an attempt to optimize their search result listings. In 2011, Google announced an algorithm change that affected nearly 12% of their U.S. query results. There cannot be any assurance as to whether these or any future changes that may be made by Google or any other search engines might impact our SEO capability in the long term. Changes in the methodologies used by search engines to display results could cause our clients’ websites to receive less favorable placements, which could reduce the number of users who click to visit our clients’ websites from these search engines. Some of our clients’ websites have experienced fluctuations in search result rankings and we anticipate similar fluctuations in the future. Internet search engines could decide that content on our clients’ websites enabled by our solutions, including online word of mouth, is unacceptable or violates their corporate policies. Any reduction in the number of users directed to our clients’ websites could negatively affect our ability to earn revenue through our SEO solution.

If we are unable to maintain our corporate culture as we grow, we could lose the passion, performance, innovation, openness, teamwork, respect and generosity that we believe contribute to our success and our business may be harmed.

We believe that a critical contributor to our success has been our corporate culture. As we grow and change, we may find it difficult to maintain the values that are fundamental to our corporate culture. Any failure to preserve our culture could negatively affect our ability to recruit and retain personnel and otherwise adversely affect our future success. We may face pressure to change our culture as we grow, particularly if we experience difficulties in attracting competent personnel who are willing to embrace our culture. However, we have no intention of succumbing to this pressure, which could make it even more difficult to attract necessary personnel.

Our revenue may be adversely affected if we are required to charge sales taxes in additional jurisdictions or other taxes for our solutions.

We collect or have imposed upon us sales or other taxes related to the solutions we sell in certain states and other jurisdictions. Additional states, countries or other jurisdictions may seek to impose sales or other tax collection obligations on us in the future, or states or jurisdictions in which we already pay tax may increase the amount of taxes we are required to pay. A successful assertion by any state, country or other jurisdiction in which we do business that we should be collecting sales or other taxes on the sale of our products and services could, among other things, create significant administrative burdens for us, result in substantial tax liabilities for past sales, discourage clients from purchasing solutions from us or otherwise substantially harm our business and results of operations.

If we undertake business combinations and acquisitions, they may be difficult to integrate, disrupt our business, dilute stockholder value or divert management’s attention.

In addition to our acquisition of PowerReviews in June 2012 and our acquisition of Longboard Media in November 2012, we may support our growth through acquisitions of, or investments in, additional complementary businesses, services or technologies in the future. Future acquisitions involve risks, such as:

• misjudgment with respect to the value, return on investment or strategic fit of any acquired operations or assets;

• challenges associated with integrating acquired technologies, operations and cultures of acquired companies;

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• exposure to unforeseen liabilities;

• diversion of management and other resources from day-to-day operations;

• possible loss of key employees, clients, suppliers and partners;

• higher than expected transaction costs;

• potential loss of commercial relationships and customers based on their concerns regarding the acquired business or technologies; and

• additional dilution to our existing stockholders if we use our common stock as consideration for such acquisitions.

As a result of these risks, we may not be able to achieve the expected benefits of any acquisition. If we are unsuccessful in completing or integrating acquisitions, we may be required to reevaluate our growth strategy and we may have incurred substantial expenses and devoted significant management time and resources in seeking to complete and integrate the acquisitions.

Future business combinations could involve the acquisition of significant intangible assets. We may need to record write-downs from future impairments of identified intangible assets and goodwill. These accounting charges would reduce any future reported earnings or increase a reported loss. In addition, we could use substantial portions of our available cash, including some or substantially all of the proceeds from our initial public offering, to pay the purchase price for acquisitions. Subject to the provisions of our existing indebtedness, it is possible that we could incur additional debt or issue additional equity securities as consideration for these acquisitions, which could cause our stockholders to suffer significant dilution.

We may not be able to utilize a significant portion of our net operating loss or research tax credit carry-forwards, which could adversely affect our operating results.

As of April 30, 2012, we had federal net operating loss carry-forwards of $49.1 million due to prior period losses, which expire beginning in 2026. We also have federal research tax credit carry-forwards of approximately $1.4 million that will begin to expire in 2026. Realization of these net operating loss and research tax credit carry-forwards depends on many factors, including our future income. There is a risk that due to regulatory changes or unforeseen reasons our existing carry-forwards could expire or otherwise be unavailable to offset future income tax liabilities, which would adversely affect our operating results. In addition, under Section 382/383 of the Internal Revenue Code of 1986, as amended, or the Code, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change net operating loss carry-forwards and other pre-change tax attributes, such as research tax credits, to offset its post-change income may be limited. As a result, if we earn net taxable income, our ability to use our pre-change net operating loss carry-forwards or other pre-change tax attributes to offset U.S. federal and state taxable income may be subject to limitations.

We are exposed to fluctuations in currency exchange rates.

We face exposure to adverse movements in currency exchange rates, which may cause our revenue and operating results to differ materially from expectations. A decline in the U.S. dollar relative to foreign currencies would increase our non-U.S. revenue, when translated into U.S. dollars. Conversely, if the U.S. dollar strengthens relative to foreign currencies, our revenue would be adversely affected. Our operating results could be negatively impacted depending on the amount of expense denominated in foreign currencies. As exchange rates vary, revenue, cost of revenue, operating expenses and other operating results, when translated, may differ materially from expectations. In addition, our revenue and operating results are subject to fluctuation if our mix of U.S. and foreign currency denominated transactions and expenses changes in the future. Even if we were to implement hedging strategies to mitigate foreign currency risk, these strategies might not eliminate our exposure to foreign exchange rate fluctuations and would involve costs and risks of their own, such as ongoing management time and expertise, external costs to implement the strategies and potential accounting implications.

If we experience material weaknesses in the future, as we have in the past, or otherwise fail to maintain an effective system of internal controls in the future, we may not be able to accurately report our financial condition or results of operations which may adversely affect investor confidence in us and, as a result, the value of our common stock.

As a public company, we are required, under Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting beginning with the filing of our Annual Report on Form 10-K for fiscal year 2013. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual and interim financial statements will not be prevented or detected on a timely basis. We will be required to disclose changes made in our internal control and procedures on a quarterly basis. However, our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 until the later of the year following our first annual report required to be filed with the SEC, or the date we are no longer an “emerging growth

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company” as defined in the recently enacted Jumpstart Our Business Startups Act of 2012, or the JOBS Act, if we take advantage of the exemptions contained in the JOBS Act. We may remain an “emerging growth company” through April 30, 2017, which would be the last day of the fiscal year following the fifth anniversary of our initial public offering, although if the market value of our common stock that is held by non-affiliates exceeds $700 million as of any October 31 before February 23, 2017, we would cease to be an “emerging growth company” at the end of that fiscal year.

We are further enhancing the computer systems processes and related documentation necessary to perform the evaluation needed to comply with Section 404. We may not be able to complete our evaluation, testing and any required remediation in a timely fashion. During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal controls are effective. If we are unable to conclude that our internal control over financial reporting is effective, we could lose investor confidence in the accuracy and completeness of our financial reports, which would likely cause the price of our common stock to decline.

We have in the past identified a material weakness in our internal control over financial reporting, and although we have remediated the material weakness identified, we cannot assure you that there will not be material weaknesses in our internal controls in the future. Prior to fiscal year 2010, our independent accounting firm was not registered by the Public Company Accounting Oversight Board, or PCAOB. In fiscal year 2010, we appointed a PCAOB registered independent accounting firm. In connection with our fiscal year 2008 and fiscal year 2009 audits following this appointment, we and our independent registered public accounting firm identified one material weakness in our internal control over financial reporting. For fiscal year 2008 and fiscal year 2009, we did not maintain a sufficient complement of personnel with an appropriate level of accounting knowledge, experience and training in the application of generally accepted accounting principles commensurate with our financial reporting requirements. Specifically, we lacked sufficient finance and accounting staff with adequate depth and skill in the application of generally accepted accounting principles with respect to the accounting for revenue recognition and internal-use software. This control deficiency resulted in material errors, requiring the restatement of our financial results for our fiscal years ended April 30, 2008 and 2009.

Since the periods with respect to which this material weakness was identified, we have taken steps to address the material weakness disclosed in the preceding paragraph, including hiring a new chief financial officer, corporate controller and other appropriately qualified accounting personnel, forming an audit committee and implementing additional financial accounting controls and procedures. As a result of these actions, we believe that this material weakness has been remediated and our consolidated financial statements and related notes included elsewhere reflect the correct application of accounting guidance in accordance with U.S. GAAP. However, we have not completed the necessary documentation and testing procedures under Section 404 of the Sarbanes-Oxley Act and cannot assure you that we will be able to implement and maintain an effective internal control over financial reporting in the future. Any failure to maintain such controls could severely inhibit our ability to accurately report our financial condition or results of operations.

Our stock price has been volatile and may be subject to volatility in the future.

The market price of our common stock has been volatile historically and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. For example, fluctuations in the valuation of companies perceived by investors to be comparable to us or in valuation metrics, such as our price to earnings ratio, could impact our stock price. Additionally, the stock markets have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations and general economic, political and market conditions, such as recessions, changes in U.S. credit ratings, interest rate changes or international currency fluctuations, may negatively affect the market price of our common stock. In the past, many companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us, regardless of the merits or outcome, could result in substantial costs and divert our management’s attention from other business concerns, which could materially harm our business.

If securities analysts do not continue to publish research or publish negative research about our business, our stock price and trading volume could decline.

The trading market for our common stock depends in part on the research and reports that securities analysts publish about us or our business. If one or more of the analysts who cover us downgrade our stock or publish negative research about our business, our stock price would likely decline. If one or more of these analysts cease coverage of our stock or fail to publish reports on us regularly, we could lose visibility in the market for our stock and demand for our stock could decrease, which could cause our stock price or trading volume to decline.

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The concentration of our capital stock ownership with insiders will likely limit your ability to influence corporate matters.

Our executive officers, directors, beneficial owners of 5.0% or more of our outstanding shares of common stock and affiliated entities together owned approximately 47.8% of our common stock outstanding as of February 28, 2013. As a result, these stockholders, acting together, may be able to control our management and affairs and matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions, such as mergers, consolidations or the sale of substantially all of our assets. Consequently, this concentration of ownership could limit your ability to influence corporate matters and may have the effect of delaying or preventing a change of control, including a merger, consolidation or other business combination involving us, or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control, even if such a change of control would benefit our other stockholders. This significant concentration of share ownership may adversely affect the trading price for our common stock because investors often perceive disadvantages in owning stock in companies with controlling stockholders.

Our stock price could decline due to the large number of outstanding shares of our common stock eligible for future sale.

The price of our common stock could decline if there are substantial sales of our common stock in the public stock market. We had an aggregate of 72,787,229 outstanding shares of common stock as of February 28, 2013. Of these shares, approximately 69.5 million are freely tradable, subject to volume and other restrictions under Rules 144 and 701 of the Securities Act, as well as our insider trading policy and any applicable 10b5-1 trading plan. Certain of our employees, including many of our executive officers, have entered into 10b5-1 trading plans providing for sales of shares of our common stock from time to time.

Of the remaining shares that are not freely tradable, all shares issued in connection with our acquisition of Longboard Media are subject to a lock-up agreement with us, which expires approximately 180 days following the closing of our acquisition of Longboard Media, or May 4, 2013.

In addition, General Atlantic Partners 90, L.P., GAP Coinvestments III, LLC, GAP Coinvestments IV, LLC, GAP Coinvestments CDA, L.P. and GAPCO GmbH & Co. KG, or collectively the GA Stockholders, have also agreed with us, subject to limited exceptions, not to sell or otherwise dispose of any shares of our common stock without our prior written consent for a period of 18 months after the date of our initial public offering. These shares are expected to be released from this lock-up on August 29, 2013.

The holders of certain shares of our common stock have rights, subject to some conditions, including the expiration of any applicable lock-up period, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.

We have also registered the issuance of all shares of common stock that we have issued and may issue under our option plans. These shares can be freely sold in the public market upon issuance, subject to the satisfaction of applicable vesting provisions, Rule 144 volume limitations and manner of sale, notice and public information requirements applicable to our affiliates.

Also, in the future, we may issue securities in connection with investments and acquisitions. The amount of our common stock issued in connection with an investment or acquisition could constitute a material portion of our then outstanding stock. Due to these factors, sales of a substantial number of shares of our common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock.

We do not anticipate paying any dividends on our common stock.

We do not anticipate paying any cash dividends on, or making repurchases of, our common stock in the foreseeable future. If we do not pay cash dividends, you could receive a return on your investment in our common stock only if the market price of our common stock has increased when you sell your shares. In addition, the terms of our loan and security agreement currently restrict our ability to pay dividends or purchase our stock.

We are an “emerging growth company,” and the reduced disclosure requirements applicable to “emerging growth companies” could make our common stock less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act. For as long as we are an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding advisory “say-on-pay” votes on executive compensation and

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shareholder advisory votes on golden parachute compensation. We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year during which we have total annual gross revenues of $1 billion or more; (ii) April 30, 2017; (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt; and (iv) the date on which we are deemed to be a “large accelerated filer” under the Exchange Act. We will be deemed a large accelerated filer on the first day of the fiscal year after the market value of our common equity held by non-affiliates exceeds $700 million, measured on October 31. As of January 31, 2013, we did not meet this threshold. We cannot predict if investors will find our common stock less attractive to the extent we rely on the exemptions available to emerging growth companies. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we are choosing to opt out of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

The unfavorable outcome of any pending or future litigation or administrative action and expenses incurred in connection with litigation could result in financial losses or harm to our business.

We are, and in the future may be, subject to legal actions in the ordinary course of our operations, both domestically and internationally. There can be no assurances as to the favorable outcome of any litigation. In addition it can be costly to defend litigation and these costs could negatively impact our financial results. On January 10, 2013, the U.S. Department of Justice filed a complaint against us with the U.S. District Court for the Northern District of California, San Francisco Division, with respect to our acquisition of PowerReviews. See “Item 1. Legal Proceedings.” In addition, on March 12, 2013, a purported shareholder derivative action was filed in the Texas State District Court for Travis County, Texas against certain of our officers and directors, former officers and directors, and against us as nominal defendant in Edmans v. Hurt et al., Case No. D-1-GN-13-000874. The complaint in this matter alleges breaches of fiduciary duties and breaches of our corporate policies in connection with our acquisition of PowerReviews and certain of our officers’ and directors’ sales of shares of our stock. The complaint requests declaratory judgment, a disgorgement of proceeds received from such sales of our stock, damages on our behalf, and equitable relief.

We have incurred and will continue to incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could adversely affect our operating results.

As a public company, we have incurred and will continue to incur significant legal, accounting and other expenses that we did not incur as a private company, and greater expenditures may be necessary in the future with the advent of new laws, regulations and stock exchange listing requirements pertaining to public companies, particularly after we are no longer an emerging growth company. The Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act of 2010, as well as rules subsequently implemented by the Securities and Exchange Commission and The NASDAQ Stock Market LLC, impose various requirements on public companies, including establishing effective internal controls and certain corporate governance practices. Our management and other personnel have begun to devote a substantial amount of time to these compliance initiatives, and additional laws and regulations may divert further management resources. Moreover, if we are not able to comply with the requirements of new compliance initiatives in a timely manner, the market price of our stock could decline, and we could be subject to investigations and other actions by the Securities and Exchange Commission and The NASDAQ Stock Market LLC, or other regulatory authorities, which would require additional financial and management resources.

Our charter documents and Delaware law could prevent a takeover that stockholders consider favorable and could also reduce the market price of our stock.

Our amended and restated certificate of incorporation and our amended and restated bylaws contain provisions that could delay or prevent a change in control of our company. These provisions could also make it more difficult for stockholders to elect directors and take other corporate actions. These provisions include:

• creating a classified board of directors whose members serve staggered three-year terms;

• not providing for cumulative voting in the election of directors;

• authorizing our board of directors to issue, without stockholder approval, preferred stock with rights senior to those of our common stock;

• prohibiting stockholder action by written consent; and

• requiring advance notification of stockholder nominations and proposals.

These and other provisions in our amended and restated certificate of incorporation and our amended and restated bylaws, and under Delaware law could discourage potential takeover attempts, reduce the price that investors might be willing to pay in the future for shares of our common stock and result in the market price of our common stock being lower than it would be without these provisions.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

On November 5, 2012, we issued 460,449 shares of our common stock as a portion of the consideration for our acquisition of Longboard Media, 230,225 of which shares were deposited into an escrow account to serve as security for the benefit of the Company and its affiliates against the indemnification obligations of the former stockholders of Longboard Media. These shares were valued at approximately $5.8 million based on the closing price of our common stock on the NASDAQ Global Market on the day prior to the date of acquisition. The number of shares of our common stock issued in connection with the acquisition is subject to adjustment based on (i) potential downward purchase price adjustment provisions and (ii) indemnification obligations of the former Longboard Media stockholders after the closing of the acquisition.

The issuance of shares of our common stock in connection with the acquisition was in reliance on the private offering exemption of Section 4(2) of the Securities Act and/or the private offering safe harbor provision of Rule 506 of Regulation D promulgated thereunder based on the following factors: (i) the number of offerees or purchasers, as applicable; (ii) the absence of general solicitation; (iii) representations obtained from the former Longboard Media stockholders with respect to their status as accredited investors; (iv) the provision of appropriate disclosure; and (v) the placement of restrictive legends on the book entry entitlements reflecting the securities coupled with investment representations obtained from the former Longboard Media stockholders being issued shares of our common stock.

Use of Proceeds from Public Offering of Common Stock

On February 29, 2012, we completed our initial public offering of 10,906,941 shares of our common stock, of which 10,422,645 shares were offered by us and 484,296 shares were offered by selling stockholders at a price to the public of $12.00 per share. The aggregate offering price for shares sold in the offering was approximately $130.9 million. This offering was effected on February 23, 2012 pursuant to a registration statement on Form S-1 (File No. 333-176506), which the SEC declared effective on such date. Morgan Stanley & Co. LLC, Deutsche Bank Securities Inc. and Credit Suisse Securities (USA) LLC acted as representatives of the underwriters in the offering. The gross proceeds that we raised from the sale of our common stock in the offering was approximately

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$125.1 million, resulting in net proceeds from the sale of our common stock of approximately $112.8 million, after deducting underwriting discounts and commissions of approximately $8.8 million and other offering expenses of approximately $3.5 million. No payments were made by us to directors, officers or persons owning ten percent or more of our common stock or to their associates, or to our affiliates, other than payments in the ordinary course of business to officers for salaries, or as a result of sales of shares of common stock by selling stockholders in the offering.

Some of the proceeds from our initial public offering have been used for working capital and general corporate purposes. We initially invested our net proceeds from our initial public offering in U.S. government-guaranteed short-term investment. In connection with our acquisition of PowerReviews, we used approximately $30.9 million in cash in our first fiscal quarter of 2013. On November 5, 2012, we used approximately $26.9 million in cash in our purchase of Longboard Media. On December 1, 2012, we used approximately $4.2 million in cash to purchase customer contracts from ShopZilla. We have broad discretion over the uses of the net proceeds. Pending other uses, we plan to invest the remaining net proceeds from our initial public offering in short-term, interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the U.S. government. There have been no material differences between the actual use of proceeds and intended use of proceeds as originally described in the final prospectus related to our initial public offering as filed with the SEC on February 24, 2012.

Item 6. Exhibits

See the Exhibit Index immediately following the signature page of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.

	BAZAARVOICE, INC.
Dated: March 14, 2013	/s/ James R. Offerdahl
	James R. Offerdahl
	Chief Financial Officer
	(Principal Financial Officer)

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EXHIBIT INDEX

Exhibit Number	Exhibit Description	Incorporated by Reference
		Form	File No.	Exhibit	Filing Date
3.1	Amended and Restated Certificate of Incorporation, as currently in effect	S-1	333-176506	3.1	August 26, 2011
3.2	Amended and Restated Bylaws, as currently in effect	S-1	333-176506	3.2	August 26, 2011
10.1*	Seventh Amendment to Loan and Security Agreement, Joinder and Waiver between the Registrant, PowerReviews, LLC, Longboard Media, Inc. and Comerica Bank, dated November 5, 2012.
10.2*	Transition Agreement and Release between the Registrant and Erin M. Nelson, dated December 7, 2012.
10.3*	Offer of Employment between the Registrant and Jim Offerdahl, dated January 23, 2013.
10.4*	Terms of Employment between the Registrant and Stephen Collins, dated January 7, 2013.
31.1*	Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS**	XBRL Instance Document
101.SCH**	XBRL Taxonomy Extension Schema Document
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith.

** In accordance with Rule 406T of Regulation S-T, the information in these exhibits is furnished and deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Exchange Act of 1934, and otherwise is not subject to liability under these sections.

55

EX-10.1

Exhibit 10.1

SEVENTH AMENDMENT TO LOAN AND

SECURITY AGREEMENT, JOINDER AND WAIVER

This Seventh Amendment to Loan and Security Agreement, Joinder and Waiver (“Amendment”) is entered into as of November 5, 2012, between COMERICA BANK (“Bank”) and BAZAARVOICE, INC., a Delaware corporation (“Parent”), POWERREVIEWS, LLC, a Delaware limited liability company (“PowerReviews”), and LONGBOARD MEDIA, INC., a Delaware corporation (“LongBoard”, and together with Parent and PowerReviews, “Borrowers”, and each individually, a “Borrower”).

RECITALS

A. Parent, PowerReviews and Bank are parties to that Loan and Security Agreement dated July 18, 2007, as amended by that First Amendment to Loan and Security Agreement dated November 30, 2008, that Second Amendment to Loan and Security Agreement dated July 20, 2009, that Third Amendment to Loan and Security Agreement dated January 22, 2010, that Fourth Amendment to Loan and Security Agreement dated September 27, 2010, that Fifth Amendment to Loan and Security Agreement dated January 31, 2012 and that Sixth Amendment to Loan and Security Agreement and Joinder dated June 19, 2012 (as amended, “Agreement”).

B. Parent, PowerReviews and Bank are parties to that certain Prime Referenced Rate Addendum to Loan and Security Agreement dated as of January 31, 2012 (the “Interest Rate Addendum”).

C. Parent acquired LongBoard Media, Inc., a Delaware corporation, through a merger between LongBoard and Leadout Acquisition Corp., a Delaware corporation and a wholly-owned Subsidiary of Parent (“Acquisition Co.”), with LongBoard continuing as the final surviving company of said merger and a Subsidiary of Parent and the cessation of the separate corporate existence of Acquisition Co. (“LongBoard Merger”), pursuant to the terms and conditions of that Agreement and Plan of Merger dated November 5, 2012 (“Merger Agreement”) among LongBoard, Parent, Acquisition Co., and the other parties party thereto.

D. Borrowers desire to join LongBoard as a “Borrower” under the Agreement and the Interest Rate Addendum, and otherwise amend the Agreement in accordance with the terms of this Amendment.

NOW, THEREFORE, the parties agree as follows:

1. By execution and delivery of this Amendment, LongBoard shall, and does hereby become a party to the Agreement and the Interest Rate Addendum as a “Borrower” as if an original signatory thereto. LongBoard (a) acknowledges and agrees that it has read the Agreement, the Interest Rate Addendum and the other Loan Documents, (b) consents to all of the provisions of the Agreement, the Interest Rate Addendum and the Loan Documents relating to it, as applicable; and (c) acknowledges and agrees that this Amendment has been freely executed without duress and after an opportunity was provided to it for review of the Agreement, the Interest Rate Addendum, this Amendment and all other Loan Documents by competent legal counsel of its choice.

2. All references to “Borrower” in the Agreement, the Interest Rate Addendum and the other Loan Documents shall hereafter mean, individually and collectively, Parent, PowerReviews and LongBoard.

3. Borrowers advised Bank that they (i) maintained the Macy’s LC Collateral Account with Silicon Valley Bank in violation of Section 6.6 of the Agreement, and (ii) violated the Sixth Amendment to Loan and Security Agreement and Joinder dated June 19, 2012, by failing to deliver to Bank a lessor’s acknowledgment and subordination for Suite 600, 22 Fourth Street, San Francisco, California, within thirty days from the Sixth Amendment Date (collectively, the “Covenant Violations”). Borrowers requested that Bank waive the Covenant Violations. Bank hereby waives the Covenant Violations (the “Waiver”) This Waiver shall not be deemed to amend or alter in any respect the terms and conditions of the Agreement, the Obligations or any other documents executed in connection therewith, or to constitute a waiver or release by the Bank of any right, remedy or Event of Default under the Agreement, the Obligations or any other documents executed in connection therewith, except to the extent specifically set forth herein. Furthermore, this waiver shall not affect in any manner whatsoever any rights or remedies of the Bank with respect to any other non-compliance by the Borrowers, or any of them, with the Agreement or any other documents executed in connection therewith, whether in the nature of an Event of Default, and whether now in existence or subsequently arising.

4. Exhibit A to the Agreement is amended by adding or amending and restating, as applicable, the following defined terms to read in their entirety as follows:

“ ‘Availability Date’ means the date on which Bank receives the Initial Audit.”

“ ‘Chief Executive Office State’ means Texas, where Borrowers’ chief executive office is located.”

“ ‘Initial Audit’ means the first completed audit of the Collateral by Bank, after the Seventh Amendment Date, the results of which are satisfactory to Bank.”

“ ‘LongBoard’ means LongBoard Media, Inc., a Delaware corporation.”

“ ‘LongBoard Contingent Obligations’ means the payment obligations and any and all indebtedness of Parent to the sellers of LongBoard pursuant to Section 2.11(c) of the LongBoard Merger Agreement.”

“ ‘LongBoard Merger Agreement’ means that certain Agreement and Plan of Merger dated November 5, 2012, among LongBoard, Parent, Acquisition Co., and the other parties party thereto.”

“ ‘Macy’s LC Collateral Account’ means the account maintained by PowerReviews with Silicon Valley Bank as set forth in the Schedule of Exceptions.”

“ ‘Seventh Amendment Date’ means November 5, 2012.”

5. The definition of “Permitted Indebtedness” set forth in Exhibit A to the Agreement is amended and restated to read in its entirety as follows:

“ ‘Permitted Indebtedness’ means:

(a) Indebtedness of Borrower in favor of Bank arising under this Agreement or any other Loan Document;

(b) Indebtedness disclosed in the Schedule;

(c) Indebtedness not to exceed $500,000, in the aggregate in any fiscal year of Borrower secured by a lien described in clause (c) of the defined term “Permitted Liens,” provided such Indebtedness does not exceed the lesser of the cost or fair market value of the equipment financed with such Indebtedness;

(d) Subordinated Debt;

(e) Indebtedness to trade creditors incurred in the ordinary course of business;

(f) Extensions, refinancings and renewals of any items of Permitted Indebtedness, provided that the principal amount is not increased or the terms modified to impose more burdensome terms upon Borrower or its Subsidiary, as the case may be;

(g) Indebtedness consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business;

(h) Indebtedness incurred in the ordinary course of business with respect to surety bonds and similar obligations arising in the ordinary course of business; and

(i) LongBoard Contingent Obligations.”

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6. The definition of “Permitted Investment” set forth in Exhibit A to the Agreement is amended and restated in its entirety to read as follows:

“‘Permitted Investment’ means:

(a) Investments disclosed in the Schedule;

(b) (i) Marketable direct obligations issued or unconditionally guaranteed by the United States of America or any agency or any State thereof maturing within one year from the date of acquisition thereof, (ii) commercial paper maturing no more than one year from the date of creation thereof and currently having rating of at least A-2 or P-2 from either Standard & Poor’s Corporation or Moody’s Investors Service, (iii) Bank’s certificates of deposit maturing no more than one year from the date of investment therein, and (iv) Bank’s money market accounts;

(c) Investments accepted in connection with Permitted Transfers;

(d) Investments (i) by Borrowers or Subsidiaries in or to other Borrowers; (ii) by Foreign Subsidiaries in or to Foreign Subsidiaries; and (iii) by Borrowers or Subsidiaries in or to Subsidiaries, which are not Borrowers hereunder, in an amount not to exceed $150,000 in the aggregate in any fiscal year;

(e) Investments not to exceed (i) $100,000 before the Qualified IPO Event and (ii) $300,000 after the Qualified IPO Event, in the aggregate in any fiscal year consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business, and (ii) loans to employees, officers or directors relating to the purchase of equity securities of Borrower or its Subsidiaries pursuant to employee stock purchase plan agreements approved by Borrower’s Board of Directors;

(f) Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of Borrower’s business;

(g) Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business, provided that this subparagraph (h) shall not apply to Investments of Borrower in any Subsidiary;

(h) Joint ventures or strategic alliances in the ordinary course of Borrower’s business consisting of the non-exclusive licensing of technology, the development of technology or the providing of technical support, provided that any cash Investments by Borrower do not exceed (i) $100,000 before the Qualified IPO Event and (ii) $1,000,000 after the Qualified IPO Event;

(i) Investments pursuant to version 1 of Borrower’s investment policy dated January 1, 2012 (the “2012 Policy”), and any amendment or supplement to or replacement of the 2012 Policy that has been approved by Borrower’s board of directors and approved by Bank in writing; and

(j) Other Investments not to exceed (i) $100,000 before the Qualified IPO Event and (ii) $250,000 after the Qualified IPO Event.”

“‘Permitted Liens’ means the following:

(a) Any Liens disclosed in the Schedule (excluding Liens to be satisfied with the proceeds of the Advances) or arising under this Agreement or the other Loan Documents;

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(b) Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by appropriate proceedings and for which Borrower maintains adequate reserves, provided the same have no priority over any of Bank’s security interests;

(c) Liens not to exceed (i) $100,000 before the Qualified IPO Event and (ii) $500,000 after the Qualified IPO Event, in the aggregate (i) upon or in any Equipment (other than Equipment financed by an Equipment Advance) acquired or held by Borrower or any of its Subsidiaries to secure the purchase price of such Equipment or indebtedness incurred solely for the purpose of financing the acquisition or lease of such Equipment, or (ii) existing on such Equipment at the time of its acquisition, provided that the Lien is confined solely to the property so acquired and improvements thereon, and the proceeds of such Equipment;

(d) Liens incurred in connection with the extension, renewal or refinancing of the indebtedness secured by Liens of the type described in clauses (a) through (c) above, provided that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the indebtedness being extended, renewed or refinanced does not increase;

(e) Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Sections 8.5 (attachment) or 8.9 (judgments);

(f) Non-exclusive licenses or sublicenses and (ii) exclusive licenses set forth on the Schedule granted in the ordinary course of Borrower’s business and, with respect to any licenses where Borrower is the licensee, any interest or title of a licensor or under any such license or sublicense;

(g) Carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business which are not overdue for a period of more than 30 days or which are being contested in good faith and by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of the applicable Person;

(h) Deposits to secure the performance of bids, trade contracts (other than for borrowed money), contracts for the purchase of property, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case, incurred in the ordinary course of business and not representing an obligation for borrowed money; and

(i) Liens in favor of other financial institutions arising in connection with Borrower’s investment accounts held at such institutions to secure standard fees for deposit services charged by, but not financing made available by such institutions, provided that Bank has a perfected security interest in the amounts held in such investment accounts.”

7. The last sentence of the definition of “Collateral” set forth in Exhibit A of the Agreement that commences “Collateral shall not include Parent’s deposit account…” is amended and restated to read in its entirety as follows:

“Collateral shall not include the Macy’s LC Collateral Account provided that such account is closed on or before January 31, 2015, and the remaining balance, if any, is transferred to a Borrower’s account at Bank.”

8. Section 2.1(b)(i) of the Agreement is amended and restated to read in its entirety as follows:

“(i) Amount. Subject to and upon the terms and conditions of this Agreement, (1) after the Availability Date, Borrower may request Advances in an aggregate outstanding amount not to exceed the lesser of (A) the Revolving Line or (B) the Borrowing Base,

4

less any amounts outstanding under the Letter of Credit/Credit Card Services Sublimit, and (2) amounts borrowed pursuant to this Section 2.1(b) may be repaid and reborrowed at any time prior to the Revolving Maturity Date, at which time all Advances under this Section 2.1(b) shall be immediately due and payable. Borrower may repay any Advances without penalty or premium.”

9. Section 6.6 of the Agreement is amended and restated to read in its entirety as follows:

“6.6 Primary Depository. Borrowers shall maintain, and shall cause each of their Subsidiaries to maintain, all of their U.S. dollar depository, operating and investment accounts held in the United States with Bank or Bank’s Affiliates governed by a control agreement satisfactory to Bank. Notwithstanding the foregoing:

(a) PowerReviews may maintain the Macy’s LC Collateral Account with Silicon Valley Bank, provided that the balance of the Macy’s LC Collateral Account does not exceed $103,713.33 at any time. Notwithstanding the foregoing, the Macy’s LC Collateral Account shall be closed on or before January 31, 2015, and the balance, if any, of such account shall be transferred to a Borrower’s account at Bank;

(b) Any Person acquired by any Borrower after July 1, 2012, in connection with a permitted Acquisition or an acquisition otherwise consented to in writing by Bank, shall be permitted to maintain accounts with financial institutions other than Bank not governed by a control agreement (each, an ‘Acquisition Legacy Account’) provided that:

(i) the balances of all Acquisition Legacy Accounts do not, individually or in the aggregate, exceed One Million Dollars ($1,000,000.00) at any time;

(ii) not later than the date that is six (6) months after the date any Person was acquired by any Borrower, all Acquisition Legacy Accounts owned by such Person are closed and the balances, if any, transferred to a Borrower’s account maintained at Bank; and

(iii) in connection with each acquisition by a Borrower, Borrowers provide, or cause to be provided, to Bank, an updated supplement to the Schedule, identifying with reasonable detail each open Acquisition Legacy Account, including, without limitation, the type, account number, balance and financial institution.

(c) So long as Borrowers maintain investment accounts with Bank or Bank’s Affiliates with an aggregate balance of at least Thirty Million Dollars ($30,000,000), Borrowers shall be permitted to maintain investment accounts with financial institutions other than Bank or Bank’s Affiliates, provided that such investment accounts are governed by control agreements in form and substance acceptable to Bank.”

10. Section 7.10 of the Agreement is amended and restated to read in its entirety as follows:

(a) “7.10 Inventory and Equipment. Store Inventory, Equipment or any Collateral having an aggregate book value in excess of $500,000.00 with a bailee, warehouseman, or similar third party unless the third party has been notified of Bank’s security interest and Bank (a) has received a landlord subordination agreement, collateral access agreement or bailment waiver, executed by the landlord, warehouseman or bailee of such location, in form and detail acceptable to Bank, or (b) is in possession of the warehouse receipt, where negotiable, covering such Inventory, Equipment or other Collateral; provided, however, that the aggregate book value of all Equipment, Inventory and other Collateral at all locations not subject to the foregoing requirements shall not exceed $500,000.00 at any time. Notwithstanding the foregoing, Borrowers shall deliver to Bank landlord subordination agreements, collateral access agreements and bailment agreements, as applicable, for any Collateral location not owned by a Borrower if such location (a) contains the books and records of a Borrower, and such books and records are not

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moved to a location covered by such an agreement within 60 days after the applicable Borrower becomes a co-Borrower under the terms of this Agreement or (b) is located in a state that has a statutory landlord lien law. Notwithstanding the preceding sentence, Borrowers shall not be required to provide a landlord waiver to Bank for the property located at 180 N. Stetson Street, Suite 3500, Chicago, Illinois, provided that the aggregate book value of Borrowers’ assets at such location does not exceed $50,000 at any time. Except for Inventory sold in the ordinary course of business and except for such other locations as Bank may approve in writing, Borrower shall keep the Inventory, Equipment and other Collateral only at the location set forth in Section 10 and such other locations of which Borrower gives Bank prior written notice and as to which Bank files a financing statement where needed to perfect its security interest.”

11. New Section 7.13 is added to the Agreement to read in its entirety as follows:

“7.13 LongBoard Contingent Obligations. Make, or permit any of its Subsidiaries to make, any payment on account of the LongBoard Contingent Obligations if at the time of any such payment any Event of Default has occurred and is continuing or would result after giving effect to such payment. Notwithstanding the foregoing, if are no outstanding Advances under the Revolving Line, the LongBoard Contingent Obligations may be paid without restriction.”

12. As soon as possible, but in any event within sixty (60) days after the Seventh Amendment Date, Borrowers shall move, or cause to be moved, all Borrower’s Books located at Suite 600, 22 Fourth Street, San Francisco, California, to a collateral location for which Bank has received a landlord subordination agreement, executed by the landlord, of such location, in form and detail acceptable to Bank.

13. The Schedule to the Agreement is deleted and replaced with the Schedule attached hereto.

14. Schedule 6.6 to the Agreement is hereby deleted from the Agreement.

15. Exhibit D to the Agreement is deleted and replaced with Exhibit D attached hereto.

16. Exhibit E to the Agreement is deleted and replaced with Exhibit E attached hereto.

17. Notwithstanding anything to the contrary in the Agreement, LongBoard shall have until January     , 2013 to provide Bank evidence of insurance in compliance with Section 6.5 of the Agreement.

18. [Intentionally Omitted.]

19. No course of dealing on the part of Bank or its officers, nor any failure or delay in the exercise of any right by Bank, shall operate as a waiver thereof, and any single or partial exercise of any such right shall not preclude any later exercise of any such right. Bank’s failure at any time to require strict performance by any Borrower of any provision shall not affect any right of Bank thereafter to demand strict compliance and performance. Any suspension or waiver of a right must be in writing signed by an officer of Bank.

20. Unless otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Agreement. The Agreement, as amended hereby, shall be and remain in full force and effect in accordance with its respective terms and hereby is ratified and confirmed in all respects. Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of Bank under the Agreement, as in effect prior to the date hereof.

21. Each Borrower waives, discharges, and forever releases Bank, Bank’s employees, officers, directors, attorneys, stockholders, and their successors and assigns, from and of any and all claims, causes of action, allegations or assertions that any Borrower has or may have had at any time up through and including the date of this Amendment, against any or all of the foregoing, regardless of whether any such claims, causes of action, allegations or assertions are known to any Borrower or whether any such claims, causes of action, allegations or assertions arose as result of Bank’s actions or omissions in connection with the Loan Documents, or any amendments, extensions or modifications thereto, or Bank’s administration of the Obligations or otherwise. EACH BORROWER WAIVES THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, AS IT MAY BE AMENDED FROM TIME TO TIME, WHICH STATES:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

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22. Each Borrower represents and warrants that the Representations and Warranties contained in the Agreement are true and correct as of the date of this Amendment, and that, except as set forth in paragraph 3 above, no Event of Default has occurred and is continuing.

23. As a condition to the effectiveness of this Amendment, Bank shall have received, in form and substance satisfactory to Bank, the following:

(a) this Amendment, executed by Borrowers;

(b) a certificate of Parent, PowerReviews and LongBoard with respect to incumbency and resolutions authorizing the execution and delivery of this Amendment and the Loan Documents to which it is a party;

(c) copies of LongBoard’s and Acquisition Co.’s corporate documents, including, without limitation, certificates of incorporation, bylaws and certificates of good standing;

(d) a financing statement (Form UCC-1) naming LongBoard as debtor;

(e) an intellectual property security agreement, executed by LongBoard;

(f) an Agreement to Furnish Insurance, executed by LongBoard;

(g) current SOS Reports indicating that except for Permitted Liens, there are no other security interests or Liens of record in the Collateral;

(h) evidence satisfactory to Bank that the LongBoard Merger has been consummated;

(i) executed copies of all of the documents executed in connection with the LongBoard Merger;

(j) all reasonable Bank Expenses incurred through the date of this Amendment, which may be debited from any of Borrower’s accounts; and

(k) such other documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate.

24. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument.

[remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the undersigned have executed this Seventh Amendment to Loan and Security Agreement, Joinder and Waiver as of the first date above written.

BAZAARVOICE, INC., a Delaware corporation
By:	/s/ Stephen Collins
Name:	Stephen R. Collins
Title:	President, CEO and CFO
POWERREVIEWS, LLC, a Delaware limited liability company
By:	/s/ Stephen Collins
Name:	Stephen R. Collins
Title:	President and Secretary
LONGBOARD MEDIA, INC., a Delaware corporation
By:	/s/ Stephen Collins
Name:	Stephen R. Collins
Title:	President and Secretary
COMERICA BANK
By:	/s/ Stephen Bitter
Name:	Stephen Bitter
Title:	Vice President

[Signature Page to Seventh Amendment to Loan and Security Agreement, Joinder and Waiver (1233485)]

EXHIBIT D

Form of Borrowing Base Certificate

Borrowers: BAZAARVOICE, INC. POWERREVIEWS, LLC LONGBOARD MEDIA, INC.		Bank: Comerica Bank Technology & Life Sciences Division Loan Analysis Department 300 W. Sixth St., Suite 1300 Austin, TX 78701 Fax: (512) 427-7178
Commitment Amount:	$30,000,000.00	Email: tlstxcompliance@comerica.com

ELIGIBLE MONTHLY SERVICE FEES

1.	Total Monthly Recurring Service Fees	$
2.	Ineligible Monthly Recurring Service Fees	$
3.	TOTAL ELIGIBLE MONTHLY SERVICE FEES (#1 minus #2 multiplied by                    %*)	$

BALANCES

4.	Maximum Loan Amount	$30,000,000.00
5.	Total Funds Available (the lesser of #3 or #4)	$
6.	Outstanding under Sublimits (Letter of Credit/Credit Card Services Sublimit)	$
7.	Present balance outstanding on Line of Credit	$
8.	Reserve Position (#5 minus #6 and #7)	$

* Insert applicable Renewal Rate Ratio

The undersigned represents and warrants that the foregoing is true, complete and correct, and that the information reflected in this Borrowing Base Certificate complies with the representations and warranties set forth in the Loan and Security Agreement between the undersigned and Comerica Bank.

Comments:

BANK USE ONLY

Rec’d By:

Date:

Reviewed By:

Date:

Authorized Signer

Exhibit D – Page 1

EXHIBIT E

Form of Compliance Certificate

Please send all Required Reporting to:		Comerica Bank Technology & Life Sciences Division Loan Analysis Department 300 W. Sixth St., Suite 1300 Austin, TX 78701 Fax: (512) 427-7178
From:	BAZAARVOICE, INC. POWERREVIEWS, LLC LONGBOARD MEDIA, INC.	Email: tlstxcompliance@comerica.com

The undersigned authorized Officers of Bazaarvoice, Inc., PowerReviews, LLC and LongBoard Media, Inc. (individually and collectively, “Borrower”), hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement between Borrower and Bank (as amended from time to time, the “Agreement”), (i) Borrower is in complete compliance for the period ending                                  with all required covenants, including without limitation the ongoing registration of intellectual property rights in accordance with Section 6.8, except as noted below and (ii) all representations and warranties of Borrower stated in the Agreement are true and correct in all respects as of the date hereof. Attached herewith are the required documents supporting the above certification. The Officer further certifies that these are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied from one period to the next except as explained in an accompanying letter or footnotes.

Please indicate compliance status by circling Yes/No under “Complies” column.

REPORTING COVENANTS	REQUIRED	COMPLIES
Company Prepared F/S	Monthly, within 45 days	YES	NO
Compliance Certificate	Monthly, within 45 days	YES	NO
CPA Audits, Unqualified F/S	Annually, within 150 days of FYE	YES	NO
Board Approved Projections	Annually, by 4/30 of each year	YES	NO
Bookings Report	Quarterly, within 45 days	YES	NO
Renewal Rate Report	Quarterly, within 45 days	YES	NO
A/R Aging	Monthly, within 45 days	YES	NO
A/P Aging	Monthly, within 45 days	YES	NO
Borrowing Base Certificate	Monthly, within 45 days	YES	NO
Intellectual Property Report	Quarterly, within 45 days
If Public:
10-Q	Quarterly, within 5 days of SEC filing (50 days)	YES	NO
10-K	Annually, within 5 days of SEC filing (95 days)	YES	NO

FINAICIAL COVENANTS	REQUIRED	ACTUAL	COMPLIES
TO BE TESTED MONTHLY, DURING ANY COVENANT TEST PERIOD
Adjusted Revenue	$100,000,000.00	$	YES	NO
Cash at Bank	See Section 6.7(b)	$	YES	NO

EXPENDITURE COVENANTS	REQUIRED	ACTUAL	COMPLIES
Capital Expenditures	< $3,000,000.00 annually	$		YES	NO
Capitalized Software Expenses	< $10,000,000.00 annually	$		YES	NO

Exhibit E – Page 1

Please Enter Below Comments Regarding Covenant Violations:

The Officer further acknowledges that at any time Borrower is not in compliance with all the terms set forth in the Agreement, including, without limitation, the financial covenants, no credit extensions will be made.

Very truly yours,

Authorized Signer

Name:

Title:

BANK USE ONLY

Rec’d By:

Date:

Reviewed By:

Date:

Financial Compliance Status: YES/NO

Exhibit E – Page 2

SCHEDULE OF EXCEPTIONS

Macy’s LC Collateral Account (Exhibit A)

Account number 330731865 maintained by PowerReviews with Silicon Valley Bank, the balance of which shall not exceed $103,713.33

Permitted Indebtedness (Exhibit A)

American Express has issued an unsecured credit card to PowerReviews.

Reimbursement obligations in connection with that certain Irrevocable Standby Letter of Credit No. SVBSF006395, in the amount of $103,713.33, issued by Silicon Valley Bank in favor of PowerReviews’ sublandlord, Macy’s West Stores, Inc., which letter of credit shall not be extended, renewed or rolled over beyond the termination date of the Sublease Agreement dated as of June 9, 2010, between PowerReviews and Macy’s West Stores, Inc., which termination date is January 31, 2015.

Permitted Liens (Exhibit A)

Until January 31, 2015, Liens on the Macy’s LC Collateral Account.

Prior Names (Section 5.5)

PowerReviews, Inc.

Leadout Acquisition Corp.

Litigation (Section 5.6)

PowerReviews has, from time to time, received letters from customers REI, Dean &DeLuca, and Number 1 Direct relating to certain allegations made by Lodsys, LLC of patent infringement potentially relating to PowerReviews’ products (collectively the “Lodsys Claims”).

PowerReviews, and one of its customers Hayneedle, Inc., received a letter dated July 19, 2011 from Kelora Systems, LLC, relating to alleged patent infringement of Kelora’s patents (the “Kelora Claim”).

Subsidiaries (Section 5.10)

Subsidiaries

Bazaarvoice Ltd. (UK company)

Bazaarvoice AB (Swedish company)

Bazaarvoice Sarl (French company)

Bazaarvoice Pte Limited (Singapore company)

Bazaarvoice B.V. (Dutch company)

Bazaarvoice GmbH (German company)

PowerReviews, LLC

LongBoard Media, Inc.

Inbound Licenses (Section 5.12)

Master Software License, Support and Services Agreement Order Form between Endeca Technologies and PowerReviews dated as of June 29, 2006

Acquisition Legacy Accounts (Section 6.6)

Financial Institution	Account Number	Account Type	Approximate Balance as of 10/31/2012
Bank of America	000261770358	Checking	$	827,000
Wells Fargo	9499-292176 & 9816-867494	Checking and Savings	$	1,280,000

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COMERICA BANK
	AUTOMATIC DEBIT AUTHORIZATION
Member FDIC

To:	Comerica Bank
Re:	Loan #

You are hereby authorized and instructed to charge account No.                      in the name of LONGBOARD MEDIA, INC., for principal, interest and other payments due on above referenced loan as set forth below and credit the loan referenced above.

X Debit each interest payment as it becomes due according to the terms of the Loan and Security Agreement and any renewals or amendments thereof.

X Debit each principal payment as it becomes due according to the terms of the Loan and Security Agreement and any renewals or amendments thereof.

X Debit each payment for Bank Expenses as it becomes due according to the terms of the Loan and Security Agreement and any renewals or amendments thereof.

This Authorization is to remain in full force and effect until revoked in writing.

/s/ Stephen Collins	November 5, 2012
Borrower Signature	Date

ATTN: BAZAARVOICE, INC. POWERREVIEWS, LLC LONGBOARD MEDIA, INC.

USA PATRIOT ACT

NOTICE

OF

CUSTOMER IDENTIFICATION

IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account.

WHAT THIS MEANS FOR YOU: when you open an account, we will ask your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.

Corporation Resolutions and Incumbency Certification

Authority to Procure Loans

I certify that I am the duly elected and qualified Secretary of BAZAARVOICE, INC., a Delaware corporation (the “Corporation”); that the following is a true and correct copy of resolutions duly adopted by the Board of Directors of the Corporation in accordance with its bylaws and applicable statutes.

Copy of Resolutions:

Be it Resolved, That:

1. Any one (1) of the following                                          (insert title) of the Corporation is authorized, for, on behalf of, and in the name of the Corporation to:

(a) Negotiate and procure loans, letters of credit and other credit or financial accommodations, jointly and severally with PowerReviews, LLC, a Delaware limited liability company and LongBoard Media, Inc., a Delaware corporation (individually and collectively, “Co-Borrower”), from Comerica Bank (“Bank”), under the terms of that certain Loan and Security Agreement dated as of July 18, 2007, as it may be amended from time to time;

(b) Discount with the Bank, commercial or other business paper belonging to the Corporation made or drawn by or upon third parties, without limit as to amount;

(c) Purchase, sell, exchange, assign, endorse for transfer and/or deliver certificates and/or instruments representing stocks, bonds, evidences of Indebtedness or other securities owned by the Corporation, whether or not registered in the name of the Corporation;

(d) Give security for any liabilities of the Corporation to the Bank by grant, security interest, assignment, lien, deed of trust or mortgage upon any real or personal property, tangible or intangible of the Corporation and/or the Co-Borrower; and

(e) Execute and deliver in form and content as may be required by the Bank any and all notes, evidences of Indebtedness, applications for letters of credit, guaranties, subordination agreements, loan and security agreements, financing statements, assignments, liens, deeds of trust, mortgages, trust receipts and other agreements, instruments or documents to carry out the purposes of these Resolutions, any or all of which may relate to all or to substantially all of the Corporation’s and/or Co-Borrower’s property and assets.

2. Said Bank be and it is authorized and directed to pay the proceeds of any such loans or discounts as directed by the persons so authorized to sign, whether so payable to the order of any of said persons in their individual capacities or not, and whether such proceeds are deposited to the individual credit of any of said persons or not.

3. Any and all agreements, instruments and documents previously executed and acts and things previously done to carry out the purposes of these Resolutions are ratified, confirmed and approved as the act or acts of the Corporation.

4. These Resolutions shall continue in force, and the Bank may consider the holders of said offices and their signatures to be and continue to be as set forth in a certified copy of these Resolutions delivered to the Bank, until notice to the contrary in writing is duly served on the Bank (such notice to have no effect on any action previously taken by the Bank in reliance on these Resolutions).

5. Any person, corporation or other legal entity dealing with the Bank may rely upon a certificate signed by an officer of the Bank to the effect that these Resolutions and any agreement, instrument or document executed pursuant to them are still in full force and effect and binding upon the Corporation.

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6. The Bank may consider the holders of the offices of the Corporation and their signatures, respectively, to be and continue to be as set forth in the Certificate of the Secretary of the Corporation until notice to the contrary in writing is duly served on the Bank.

I further certify that the above Resolutions are in full force and effect as of the date of this Certificate; that these Resolutions and any borrowings or financial accommodations under these Resolutions have been properly noted in the corporate books and records, and have not been rescinded, annulled, revoked or modified; that neither the foregoing Resolutions nor any actions to be taken pursuant to them are or will be in contravention of any provision of the certificate of incorporation or bylaws of the Corporation or of any agreement, indenture or other instrument to which the Corporation is a party or by which it is bound; and that neither the certificate of incorporation nor bylaws of the Corporation nor any agreement, indenture or other instrument to which the Corporation is a party or by which it is bound require the vote or consent of shareholders of the Corporation to authorize any act, matter or thing described in the foregoing Resolutions.

I further certify that the following named persons have been duly elected to the offices set opposite their respective names, that they continue to hold these offices at the present time, and that the signatures which appear below are the genuine, original signatures of each respectively:

(PLEASE SUPPLY GENUINE SIGNATURES OF AUTHORIZED SIGNERS BELOW)

NAME (Type or Print)	TITLE	SIGNATURE
Stephen Collins	Secretary/President	/s/ Stephen Collins

In Witness Whereof, I have affixed my name as Secretary and have caused the corporate seal (where available) of said Corporation to be affixed on November 5, 2012.

/s/ Stephen Collins

Secretary

	Bazaarvoice, Inc.
The Above Statements are Correct.	By: /s/ Bryan Barksdale
	SIGNATURE OF OFFICER OR DIRECTOR OR, IF NONE. A SHAREHOLDER OTHER THAN SECRETARY WHEN SECRETARY IS AUTHORIZED TO SIGN ALONE.

Failure to complete the above when the Secretary is authorized to sign alone shall constitute a certification by the Secretary that the Secretary is the sole Shareholder, Director and Officer of the Corporation.

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Limited Liability Company Authority to Procure Loans

As of November 5, 2012, the undersigned, being the sole member of the limited liability company named below, acknowledge, confirm and certify to Comerica Bank (“Bank”) that:

1. POWERREVIEWS, LLC, a Delaware limited liability company (“Company”).

2. Any (1) one of the following person(s):

NAME	TITLE	SIGNATURE
Stephen R. Collins	President and Secretary	/s/ Stephen R. Collins
Chris Lynch	VP Finance	/s/ Chris Lynch

is authorized to:

(a) Negotiate and procure loans, letters of credit and other credit or financial accommodations, jointly and severally with Bazaarvoice, Inc., a Delaware corporation and LongBoard Media, Inc., a Delaware corporation (individually and collectively, “Co-Borrower”), from Comerica Bank (“Bank”), under the terms of that certain Loan and Security Agreement dated as of July 18, 2007, as it may be amended from time to time;

(b) Discount with the Bank, commercial or other business paper belonging to the Company made or drawn by or upon third parties, without limit as to amount;

(c) Purchase, sell, exchange, assign, endorse for transfer and/or deliver certificates and/or instruments representing stocks, bonds, evidences of Indebtedness or other securities owned by the Company, whether or not registered in the name of the Company;

(d) Give security for any liabilities of the Company to the Bank by grant, security interest, assignment, lien, deed of trust or mortgage upon any real or personal property, tangible or intangible of the Company and/or the Co-Borrower; and

(e) Execute and deliver in form and content as may be required by the Bank any and all notes, evidences of Indebtedness, applications for letters of credit, guaranties, subordination agreements, loan and security agreements, financing statements, assignments, liens, deeds of trust, mortgages, trust receipts and other agreements, instruments or documents to carry out the purposes of these Resolutions, any or all of which may relate to all or to substantially all of the Company’s property and assets.

3. The Bank is further authorized and directed to pay the proceeds of any such loans, advances or discounts as directed by the member(s) and/or manager(s) so authorized to sign, whether so payable to the order of any of such person(s) in his or her individual capacity or not, and whether such proceeds are deposited to the individual credit of any of such person(s) or not.

4. This Authorization shall be effective (and Bank shall be entitled to rely fully on it) notwithstanding any contrary terms contained in any Company agreement now or hereafter adopted by the Company, and shall remain in full force and effect until the Company officially notifies the Bank to the contrary in writing (but said notice shall have no effect whatsoever on any action previously taken or any commitment previously entered into by Bank in reliance on this Authorization).

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5. Any and all agreements, instruments and documents previously executed and acts and things previously done to carry out the purposes of this Authorization are ratified, confirmed and approved as the act or acts of the Company.

6. If other persons become members or managers in the Company, the Company shall notify the Bank promptly in writing of any such changes. This Authorization is not a consent by the Bank to the adding of members or managers to the Company.

7. PLEASE CHECK APPROPRIATE STATEMENT:

x The Company’s Certificate of Formation and Operating Agreement (copies of which have been provided to the Bank) are not inconsistent with this Authorization.

¨ The Company has not adopted an Operating Agreement; and the Company agrees that if it adopts an Operating Agreement in the future it will promptly deliver a copy of the same within ten (10) days of adoption thereof.

8. The signature appearing below is the genuine, original signature of the sole member of the Company.

BAZAARVOICE, INC., a Delaware corporation
By:	/s/ Bryan Barksdale
Name:	Bryan Barksdale
Title:	Secretary

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Corporation Resolutions and Incumbency Certification

Authority to Procure Loans

I certify that I am the duly elected and qualified Secretary of LONGBOARD MEDIA, INC., a Delaware corporation (the “Corporation”); that the following is a true and correct copy of resolutions duly adopted by the Board of Directors of the Corporation in accordance with its bylaws and applicable statutes.

Copy of Resolutions:

Be it Resolved, That:

1. Any one (1) of the following President/CEO/CFO – VP Finance (insert title) of the Corporation is authorized, for, on behalf of, and in the name of the Corporation to:

(a) Negotiate and procure loans, letters of credit and other credit or financial accommodations, jointly and severally with Bazaarvoice, Inc., a Delaware corporation, and PowerReviews, LLC, a Delaware limited liability company (individually and collectively, “Co-Borrower”), from Comerica Bank (“Bank”) under the terms of that certain Loan and Security Agreement dated as of July 18, 2007, as amended from time to time;

(b) Discount with the Bank, commercial or other business paper belonging to the Corporation made or drawn by or upon third parties, without limit as to amount;

(c) Purchase, sell, exchange, assign, endorse for transfer and/or deliver certificates and/or instruments representing stocks, bonds, evidences of Indebtedness or other securities owned by the Corporation, whether or not registered in the name of the Corporation;

(d) Give security for any liabilities of the Corporation and/or any Co-Borrower to the Bank by grant, security interest, assignment, lien, deed of trust or mortgage upon any real or personal property, tangible or intangible of the Corporation; and

(e) Execute and deliver in form and content as may be required by the Bank any and all notes, evidences of Indebtedness, applications for letters of credit, guaranties, subordination agreements, loan and security agreements, financing statements, assignments, liens, deeds of trust, mortgages, trust receipts and other agreements, instruments or documents to carry out the purposes of these Resolutions, any or all of which may relate to all or to substantially all of the Corporation’s and/or any Co-Borrower’s property and assets.

2. Said Bank be and it is authorized and directed to pay the proceeds of any such loans or discounts as directed by the persons so authorized to sign, whether so payable to the order of any of said persons in their individual capacities or not, and whether such proceeds are deposited to the individual credit of any of said persons or not.

3. Any and all agreements, instruments and documents previously executed and acts and things previously done to carry out the purposes of these Resolutions are ratified, confirmed and approved as the act or acts of the Corporation.

4. These Resolutions shall continue in force, and the Bank may consider the holders of said offices and their signatures to be and continue to be as set forth in a certified copy of these Resolutions delivered to the Bank, until notice to the contrary in writing is duly served on the Bank (such notice to have no effect on any action previously taken by the Bank in reliance on these Resolutions).

5. Any person, corporation or other legal entity dealing with the Bank may rely upon a certificate signed by an officer of the Bank to the effect that these Resolutions and any agreement, instrument or document executed pursuant to them are still in full force and effect and binding upon the Corporation.

6. The Bank may consider the holders of the offices of the Corporation and their signatures, respectively, to be and continue to be as set forth in the Certificate of the Secretary of the Corporation until notice to the contrary in writing is duly served on the Bank.

I further certify that the above Resolutions are in full force and effect as of the date of this Certificate; that these Resolutions and any borrowings or financial accommodations under these Resolutions have been properly noted in the corporate books and records, and have not been rescinded, annulled, revoked or modified; that neither the foregoing Resolutions nor any actions to be taken pursuant to them are or will be in contravention of any provision of the certificate of incorporation or bylaws of the Corporation or of any agreement, indenture or other instrument to which the Corporation is a party or by which it is bound; and that neither the certificate of incorporation nor bylaws of the Corporation nor any agreement, indenture or other instrument to which the Corporation is a party or by which it is bound require the vote or consent of shareholders of the Corporation to authorize any act, matter or thing described in the foregoing Resolutions.

I further certify that the following named persons have been duly elected to the offices set opposite their respective names, that they continue to hold these offices at the present time, and that the signatures which appear below are the genuine, original signatures of each respectively:

(PLEASE SUPPLY GENUINE SIGNATURES OF AUTHORIZED SIGNERS BELOW)

NAME (Type or Print)	TITLE	SIGNATURE
Stephen R. Collins	President/CEO/CFO	/s/ Stephen Collins
Chris Lynch	VP Finance	/s/ Chris Lynch

In Witness Whereof, I have affixed my name as Secretary and have caused the corporate seal (where available) of said Corporation to be affixed on November 5, 2012.

/s/ Bryan Barksdale

Secretary

The Above Statements are Correct.	/s/ Stephen Collins
	SIGNATURE OF OFFICER OR DIRECTOR OR, IF NONE. A SHAREHOLDER OTHER THAN SECRETARY WHEN SECRETARY IS AUTHORIZED TO SIGN ALONE.

Failure to complete the above when the Secretary is authorized to sign alone shall constitute a certification by the Secretary that the Secretary is the sole Shareholder, Director and Officer of the Corporation.

EX-10.2

Exhibit 10.2

TRANSITION AGREEMENT AND RELEASE

This Transition Agreement and Release (“Agreement”) is made by and between Erin Nelson (“Employee”) and Bazaarvoice, Inc. (the “Company”) (collectively referred to as the “Parties” or individually referred to as a “Party”).

RECITALS

WHEREAS, Employee is currently employed by the Company;

WHEREAS, Employee signed an offer letter with the Company dated September 2, 2010, which was amended and restated as of August 16, 2011 (the “Offer Letter”);

WHEREAS, Employee signed an Employee Proprietary Information Agreement with the Company on October 29, 2010 (the “Confidentiality Agreement”);

WHEREAS, the Company and Employee have entered into a Stock Option Agreement with a grant date of November 16, 2010, evidencing an option to purchase 429,232 shares of the Company’s common stock (the “2010 Option Grant”), which grant is subject to the terms and conditions of the Company’s 2005 Stock Option Plan and the Stock Option Agreement (collectively, the “2010 Stock Agreements”);

WHEREAS, the Company and Employee have entered into a (i) Stock Option Agreement with a grant date of June 10, 2012, evidencing an option to purchase 14,488 shares of the Company’s common stock (the “2012 Option Grant”), and (ii) Restricted Stock Unit Agreement with a grant date of June 10, 2012, evidencing a restricted stock unit grant of 7,929 shares of the Company’s common stock (the “2012 RSU Grant”), both of which grants are subject to the terms and conditions of the Company’s 2012 Equity Incentive Plan (collectively, the “2012 Stock Agreements” and, together with the 2010 Stock Agreements, the “Stock Agreements”);

WHEREAS, Employee and the Company desire that Employee continue to provide de minimus services to the Company between December 7, 2012 (the “Transition Date”) and the earlier of (i) Employee’s acceptance of other employment and (ii) March 8, 2013 (the “Termination Date”) (the period of time between the Transition Date and the Termination Date referred to as the “Term”); and

WHEREAS, the Parties wish to resolve any and all disputes, claims, complaints, grievances, charges, actions, petitions, and demands that the Employee may have against the Company and any of the Releasees as defined below, including, but not limited to, any and all claims arising out of or in any way related to Employee’s employment with or separation from the Company.

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NOW, THEREFORE, in consideration of the mutual promises made herein, the Company and Employee hereby agree as follows:

AGREEMENT

1. Duties and Scope of Employment. Effective as of the Transition Date, Employee’s shall step down as Chief Marketing Officer of the Company. Employee agrees that the Offer Letter is hereby terminated, and her continued service to the Company during the Term will be subject to the terms of this Agreement. During the Term, Employee will serve as an employee of the Company, reporting to the Company’s Chief Executive Officer and providing phone consult services on an as-needed basis, and will not be required to work at the Company’s offices. Employee will not be an officer of the Company during the Term and shall at all times comply with the Company’s External Communication Policy, which is attached hereto as Exhibit B (provided that the Company may amend the same from time to time as it deems appropriate or advisable). In the event that Employee accepts other paid employment which averages over twenty (20) hours per week employment, she shall promptly notify the Company and her employment with the Company and the Term will immediately terminate. During the Term, Employee shall continue to be eligible for health, dental, vision and other benefit plans for which she was eligible and in which she was enrolled prior to the Transition Date, provided that, from and after the Transition Date, Employee shall not be eligible for any expense reimbursement that not are pre-approved by the Chief Executive Officer in writing or cell phone reimbursement unless such expenses or cell phone bills relate to periods prior to the Transition Date.

2. Consideration. In consideration of Employee’s execution of this Agreement and Employee’s fulfillment of all of its terms and conditions, and provided that Employee does not revoke the release under paragraph 6 below, the Company agrees as follows:

a. Continuing Base Salary. During the Term, the Company will pay Employee as compensation for her services a base salary at a rate of $20,833.33 per month (annualized to $250,000.00 per year). This salary will be paid in regular installments in accordance with the Company’s normal payroll practices (subject to required withholding) and shall be pro-rated based on the number of days elapsed in the Term.

b. Transition Payment. In consideration of services provided to the Company prior to the date of this Agreement, and subject to Employee’s compliance with this Agreement, the Company will pay Employee a lump sum in an amount equal to $600,000.00, less applicable withholdings (“Transition Bonus”). The Transition Bonus shall be paid in a lump sum within five (5) days following the Effective Date of the release under paragraph 6 below, but no later than December 31, 2012.

c. Separation Agreement. Employee agrees to sign the Separation and Release Agreement attached as Exhibit A (the “Separation Agreement”) within three (3) business days of the Termination Date. Subject to Employee signing and not revoking the Separation Agreement, the Company agrees to pay Employee a lump sum of $1,000.00, less applicable withholding (the “Severance Amount”). The payment of the Severance Amount will be made within ten (10) days following the Effective Date of the Separation Agreement.

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d. General. Employee acknowledges that without this Agreement, she is otherwise not entitled to any of the consideration listed in this paragraph 1.

3. Stock. As of the Transition Date, Employee has vested in 165,600 shares subject to the 2010 Option Grant¹ and no shares under the 2012 Option Grant or the 2012 RSU Grant pursuant to the Stock Agreements. The exercise of the vested shares subject to Employee’s options shall continue to be governed by the terms and conditions of the Stock Agreements. During the Term, Employee shall remain a Service Provider (as used in the applicable Stock Agreements) for purposes of the Stock Agreements. The Parties agree that no further shares of the Company’s common stock shall vest under the Stock Agreements following the Termination Date. To the extent Employee’s options are vested and remain outstanding upon the expiration of the Term, the post-termination exercise period under the Stock Agreements shall commence upon the Termination Date.

4. Benefits. Employee’s health insurance benefits shall cease on the last day of the month in which the Termination Date occurs, subject to Employee’s right to continue her health insurance under COBRA. The Company and Employee agree that Employee shall cease accruing vacation/paid time off as of the Transition Date, and that Employee shall use all of her accrued, unused vacation that exists as of the Transition Date during the Term (to cover days that she is not providing services as described in Section 1 above). Notwithstanding, Employee will not have to provide services or be available except as provided in Section 1. The Company and Employee agree that Employee’s accrued vacation/paid time off balance will be zero (0) days as of the Termination Date. Employee’s participation in all other benefits and incidents of employment, including, but not limited to, vesting in stock options, shall cease as of the Termination Date.

5. Payment of Salary and Receipt of All Benefits. Employee acknowledges and represents that, other than the consideration set forth in this Agreement and related to her employment through the Term, the Company has paid or provided all salary, wages, bonuses, accrued vacation/paid time off, premiums, leaves, housing allowances, relocation costs, interest, severance, outplacement costs, fees, reimbursable expenses, commissions, stock, stock options, vesting, and any and all other benefits and compensation due to Employee.

6. Release of Claims. Employee agrees that the foregoing consideration represents settlement in full of all outstanding obligations owed to Employee by the Company and its current and former officers, directors, employees, agents, investors, attorneys, shareholders, administrators, affiliates, benefit plans, plan administrators, insurers, trustees, parents, divisions, and subsidiaries, and predecessor and successor corporations and assigns (collectively, the “Releasees”). Employee, on her own behalf and on behalf of her respective heirs, family members, executors, agents, and assigns, hereby and forever releases the Releasees from, and agrees not to sue concerning, or in any manner to institute, prosecute, or pursue, any claim, complaint, charge, duty, obligation, or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that Employee may possess

¹  1 223,558 shares vested (25 months of vesting) less 57,958 sold in offering and pursuant to trading plan.

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against any of the Releasees arising from any omissions, acts, facts, or damages that have occurred up until and including the Effective Date of this Agreement, including, without limitation:

a. any and all claims relating to or arising from Employee’s employment relationship with the Company and the termination of that relationship, including without limitation, any claims under the Offer Letter;

b. any and all claims relating to, or arising from, Employee’s right to purchase, or actual purchase of shares of stock of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law;

c. any and all claims for wrongful discharge of employment; constructive discharge; termination in violation of public policy; discrimination; harassment; retaliation; breach of contract, both express and implied; breach of covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent or intentional infliction of emotional distress; fraud; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; unfair business practices; defamation; libel; slander; negligence; personal injury; assault; battery; invasion of privacy; false imprisonment; conversion; and disability benefits;

d. any and all claims for violation of any federal, state, or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the Rehabilitation Act of 1973; the Americans with Disabilities Act of 1990; the Equal Pay Act; the Fair Labor Standards Act; the Fair Credit Reporting Act; the Age Discrimination in Employment Act of 1967; the Older Workers Benefit Protection Act; the Employee Retirement Income Security Act of 1974; the Worker Adjustment and Retraining Notification Act; the Family and Medical Leave Act; the Sarbanes-Oxley Act of 2002; the Texas Payday Act; Texas Workers’ Compensation Act; and Chapter 21 of the Texas Labor Code (also known as the Texas Commission on Human Rights Act);

e. any and all claims for violation of the federal or any state constitution;

f. any and all claims arising out of any other laws and regulations relating to employment or employment discrimination;

g. any claim for any loss, cost, damage, or expense arising out of any dispute over the non-withholding or other tax treatment of any of the proceeds received by Employee as a result of this Agreement; and

h. any and all claims for attorneys’ fees and costs.

Employee agrees that the release set forth in this section shall be and remain in effect in all respects as a complete general release as to the matters released. This release does not extend to any obligations incurred under this Agreement or as an Employee during the Term. This

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release does not release claims that cannot be released as a matter of law, including, but not limited to, Employee’s right to file a charge with or participate in a charge by the Equal Employment Opportunity Commission, or any other local, state, or federal administrative body or government agency that is authorized to enforce or administer laws related to employment, against the Company (with the understanding that any such filing or participation does not give Employee the right to recover any monetary damages against the Company; Employee’s release of claims herein bars Employee from recovering such monetary relief from the Company).

7. Acknowledgment of Waiver of Claims under ADEA. Employee acknowledges that she is waiving and releasing any rights she may have under the Age Discrimination in Employment Act of 1967 (“ADEA”), and that this waiver and release is knowing and voluntary. Employee agrees that this waiver and release does not apply to any rights or claims that may arise under the ADEA after the Effective Date of this Agreement. Employee acknowledges that the consideration given for this waiver and release is in addition to anything of value to which Employee was already entitled. Employee further acknowledges that she has been advised by this writing that: (a) she should consult with an attorney prior to executing this Agreement; (b) she has twenty-one (21) days within which to consider this Agreement; (c) she has seven (7) days following her execution of this Agreement to revoke this Agreement; (d) this Agreement shall not be effective until after the revocation period has expired; and (e) nothing in this Agreement prevents or precludes Employee from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties, or costs for doing so, unless specifically authorized by federal law. In the event Employee signs this Agreement and returns it to the Company in less than the 21-day period identified above, Employee hereby acknowledges that she has freely and voluntarily chosen to waive the time period allotted for considering this Agreement. Employee acknowledges and understands that revocation must be accomplished by a written notification to Kathy Smith-Willman, Director of People Relations, is received prior to the Effective Date. The Parties agree that changes to this Agreement, whether material or immaterial, do not restart the running of the 21-day consideration period referenced above.

8. Unknown Claims. Employee acknowledges that she has been advised to consult with legal counsel and that she is familiar with the principle that a general release does not extend to claims that the releaser does not know or suspect to exist in her favor at the time of executing the release, which, if known by her, must have materially affected her settlement with the releasee. Employee, being aware of said principle, agrees to expressly waive any rights she may have to that effect, as well as under any other statute or common law principles of similar effect.

9. Employee Wrongdoing or Misconduct. Employees represents that she is not aware of any wrongdoing or misconduct committed by any employee at Bazaarvoice. In the event that Employee is aware of any wrongdoing or misconduct by an employee, then Employee represents that she has reported this wrongdoing or misconduct to the General Counsel or Director of People Operations.

10. No Pending or Future Lawsuits. Employee represents that she has no lawsuits, claims, or actions pending in her name, or on behalf of any other person or entity, against the

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Company or any of the other Releasees. Employee also represents that she does not intend to bring any claims on her own behalf or on behalf of any other person or entity against the Company or any of the other Releasees.

11. Confidentiality. Employee agrees to maintain in complete confidence the existence of this Agreement, the contents and terms of this Agreement, and the consideration for this Agreement (hereinafter collectively referred to as “Separation Information”). Except as required by law, Employee may disclose Separation Information only to her immediate family members, the Court in any proceedings to enforce the terms of this Agreement, Employee’s counsel, and Employee’s accountant and any professional tax advisor to the extent that they need to know the Separation Information in order to provide advice on tax treatment or to prepare tax returns, and must prevent disclosure of any Separation Information to all other third parties. Employee agrees that she will not publicize, directly or indirectly, any Separation Information.

Employee acknowledges and agrees that the confidentiality of the Separation Information is of the essence and a material term of this Agreement. The Parties agree that if the Company proves that Employee breached this Confidentiality provision, the Company shall be entitled to an award of its costs spent enforcing this provision, including all reasonable attorneys’ fees associated with the enforcement action, without regard to whether the Company can establish actual damages from Employee’s breach, except to the extent that such breach constitutes a legal action by Employee that directly pertains to the ADEA. Any such individual breach or disclosure shall not excuse Employee from her obligations hereunder, nor permit her to make additional disclosures. Employee warrants that she has not disclosed, orally or in writing, directly or indirectly, any of the Separation Information to any unauthorized party.

12. Trade Secrets and Confidential Information/Company Property. Employee reaffirms and agrees to observe and abide by the terms of the Confidentiality Agreement, specifically including the provisions regarding nondisclosure of the Company’s trade secrets and confidential and proprietary information, and any restrictive covenants contained therein.

13. No Cooperation. Employee agrees that she will not knowingly encourage, counsel, or assist any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints by any third party against any of the Releasees, unless under a subpoena or other court order to do so or as related directly to the ADEA waiver in this Agreement. Employee agrees both to immediately notify the Company upon receipt of any such subpoena or court order, and to furnish, within three (3) business days of its receipt, a copy of such subpoena or other court order. If approached by anyone for counsel or assistance in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints against any of the Releasees, Employee shall state no more than that she cannot provide counsel or assistance.

14. Non-Disparagement. Employee agrees to refrain from any disparagement, defamation, libel, or slander of any of the Releasees, and agrees to refrain from any tortious interference with the contracts and relationships of any of the Releasees. The directors and officers of the Company agree to refrain from any disparagement, defamation, libel, or slander of Employee. Employee shall direct any inquiries by potential future employers to the Chief People Officer or such other person then serving as the leader of Company’s human resources department, who shall only provide Employee’s last position and dates of employment.

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15. Non-Solicitation. Employee agrees that during the Term and for a period of twelve (12) months immediately following the Termination Date, Employee shall not directly or indirectly solicit any of the Company’s employees to leave their employment at the Company.

16. Breach. In addition to the rights provided under paragraph 25 below (the “Attorneys’ Fees” section), Employee acknowledges and agrees that any material breach of this Agreement, unless such breach constitutes a legal action by Employee challenging or seeking a determination in good faith of the validity of the waiver herein under the ADEA, or of any provision of the Confidentiality Agreement shall entitle the Company immediately to recover and/or cease providing the consideration provided to Employee under this Agreement and to obtain damages, except as provided by law.

17. No Admission of Liability. Employee understands and acknowledges that this Agreement constitutes a compromise and settlement of any and all actual or potential disputed claims by Employee. No action taken by the Company hereto, either previously or in connection with this Agreement, shall be deemed or construed to be (a) an admission of the truth or falsity of any actual or potential claims or (b) an acknowledgment or admission by the Company of any fault or liability whatsoever to Employee or to any third party.

18. Costs. The Parties shall each bear their own costs, attorneys’ fees, and other fees incurred in connection with the preparation of this Agreement.

19. ARBITRATION. THE PARTIES AGREE THAT ANY AND ALL DISPUTES ARISING OUT OF THE TERMS OF THIS AGREEMENT, THEIR INTERPRETATION, AND ANY OF THE MATTERS HEREIN RELEASED, SHALL BE SUBJECT TO ARBITRATION IN TRAVIS COUNTY, TEXAS BEFORE THE JUDICIAL ARBITRATION & MEDIATION SERVICES, INC. (“JAMS”), PURSUANT TO ITS EMPLOYMENT ARBITRATION RULES & PROCEDURES (“JAMS RULES”). THE ARBITRATOR MAY GRANT INJUNCTIONS AND OTHER RELIEF IN SUCH DISPUTES. THE ARBITRATOR SHALL ADMINISTER AND CONDUCT ANY ARBITRATION IN ACCORDANCE WITH TEXAS LAW, AND THE ARBITRATOR SHALL APPLY SUBSTANTIVE AND PROCEDURAL TEXAS LAW TO ANY DISPUTE OR CLAIM, WITHOUT REFERENCE TO ANY CONFLICT-OF-LAW PROVISIONS OF ANY JURISDICTION. TO THE EXTENT THAT THE JAMS RULES CONFLICT WITH TEXAS LAW, TEXAS LAW SHALL TAKE PRECEDENCE. THE DECISION OF THE ARBITRATOR SHALL BE FINAL, CONCLUSIVE, AND BINDING ON THE PARTIES TO THE ARBITRATION. THE PARTIES AGREE THAT THE PREVAILING PARTY IN ANY ARBITRATION SHALL BE ENTITLED TO INJUNCTIVE RELIEF IN ANY COURT OF COMPETENT JURISDICTION TO ENFORCE THE ARBITRATION AWARD. THE PARTIES TO THE ARBITRATION SHALL EACH PAY AN EQUAL SHARE OF THE COSTS AND EXPENSES OF SUCH ARBITRATION, AND EACH PARTY SHALL SEPARATELY PAY FOR ITS RESPECTIVE COUNSEL FEES AND EXPENSES; PROVIDED, HOWEVER, THAT THE ARBITRATOR SHALL AWARD ATTORNEYS’ FEES AND COSTS TO THE PREVAILING PARTY, EXCEPT AS PROHIBITED BY LAW.

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THE PARTIES HEREBY AGREE TO WAIVE THEIR RIGHT TO HAVE ANY DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW BY A JUDGE OR JURY. NOTWITHSTANDING THE FOREGOING, THIS SECTION WILL NOT PREVENT EITHER PARTY FROM SEEKING INJUNCTIVE RELIEF (OR ANY OTHER PROVISIONAL REMEDY) FROM ANY COURT HAVING JURISDICTION OVER THE PARTIES AND THE SUBJECT MATTER OF THEIR DISPUTE RELATING TO THIS AGREEMENT AND THE AGREEMENTS INCORPORATED HEREIN BY REFERENCE. SHOULD ANY PART OF THE ARBITRATION AGREEMENT CONTAINED IN THIS PARAGRAPH CONFLICT WITH ANY OTHER ARBITRATION AGREEMENT BETWEEN THE PARTIES, THE PARTIES AGREE THAT THIS ARBITRATION AGREEMENT SHALL GOVERN.

20. Tax Consequences. The Company makes no representations or warranties with respect to the tax consequences of the payments and any other consideration provided to Employee or made on her behalf under the terms of this Agreement. Employee agrees and understands that she is responsible for payment, if any, of local, state, and/or federal taxes on the payments and any other consideration provided hereunder by the Company and any penalties or assessments thereon. Employee further agrees to indemnify and hold the Company harmless from any claims, demands, deficiencies, penalties, interest, assessments, executions, judgments, or recoveries by any government agency against the Company for any amounts claimed due on account of (a) Employee’s failure to pay or the Company’s failure to withhold, or delayed payment of, federal or state taxes, or (b) damages sustained by the Company by reason of any such claims, including attorneys’ fees and costs.

21. Authority. The Company represents and warrants that the undersigned has the authority to act on behalf of the Company and to bind the Company and all who may claim through it to the terms and conditions of this Agreement. Employee represents and warrants that she has the capacity to act on her own behalf and on behalf of all who might claim through her to bind them to the terms and conditions of this Agreement. Each Party warrants and represents that there are no liens or claims of lien or assignments in law or equity or otherwise of or against any of the claims or causes of action released herein.

22. No Representations. Employee represents that she has had an opportunity to consult with an attorney, and has carefully read and understands the scope and effect of the provisions of this Agreement. Employee has not relied upon any representations or statements made by the Company that are not specifically set forth in this Agreement.

23. No Waiver. The failure of either party to insist upon the performance of any of the terms and conditions in this Agreement, or the failure to prosecute any breach of any of the terms or conditions of this Agreement, shall not be construed thereafter as a waiver of any such terms or conditions. This entire Agreement shall remain in full force and effect as if no such forbearance or failure of performance had occurred.

24. Severability. In the event that any provision or any portion of any provision hereof or any surviving agreement made a part hereof becomes or is declared by a court of competent jurisdiction or arbitrator to be illegal, unenforceable, or void, this Agreement shall continue in full force and effect without said provision or portion of provision.

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25. Attorneys’ Fees. Except with regard to a legal action challenging or seeking a determination in good faith of the validity of the waiver herein under the ADEA, in the event that either Party brings an action to enforce or effect its rights under this Agreement, the prevailing Party shall be entitled to recover its costs and expenses, including the costs of mediation, arbitration, litigation, court fees, and reasonable attorneys’ fees incurred in connection with such an action.

26. Entire Agreement. This Agreement, together with the Separation Agreement attached hereto as Exhibit A, represents the entire agreement and understanding between the Company and Employee concerning the subject matter of this Agreement and Employee’s employment with the Company, transition of employment and separation from employment with the Company and the events leading thereto and associated therewith, and supersedes and replaces any and all prior agreements and understandings concerning the subject matter of this Agreement and Employee’s relationship with the Company, with the exception of the Confidentiality Agreement, the Stock Agreements, benefit plan documentation and policies related to Employee’s employment through the Term.

27. No Oral Modification. This Agreement may only be amended in a writing signed by Employee and the Company’s Chief Executive Officer.

28. Governing Law. This Agreement shall be governed by the laws of the State of Texas, without regard for choice-of-law provisions. Both parties consent to personal and exclusive jurisdiction and venue in the State of Texas.

29. Section 409A. If the Company determines that any cash severance benefits, health continuation coverage, or additional benefits provided under this Agreement shall fail to satisfy the distribution requirement of Section 409A(a)(2)(A) or the Internal Revenue Code of 1986, as amended (the “Code”) as result of Section 409A(a)(2)(B)(i) of the Code, the payment of such benefit shall be accelerated to the minimum extent necessary so that the benefit is not subject to the provisions of Section 409(a)(1) of the Code. (It is the intention of the preceding sentence to apply the short-term deferral provisions of Section 409A of the Code, and the regulations and other guidance thereunder, to such payments, and the payment schedule as revised after the application of the preceding sentence shall be referred to as the “Revised Payment Schedule.”) However, if there is no Revised Payment Schedule that would avoid the application of Section 409A(a)(1) of the Code, the payment of such benefits shall not be paid pursuant to a Revised Payment Schedule and instead shall be delayed to the minimum extent necessary so that such benefits are not subject to the provisions of section 409A(a)(1) of the Code. The parties shall mutually agree to any conditions to or adjust the amounts paid pursuant to this paragraph to preserve, as closely as possible, the economic consequences that would have applied in the absence of this paragraph; provided, however, that no such condition or adjustment shall result in the payments being subject to Section 409A(a)(1) of the Code. The Company believes that its obligations to Employee pursuant to this Agreement are not subject to Section 409A(a)(1), provided that the Company shall have no liability to Employee in the event that such belief shall prove to be inaccurate or incorrect.

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30. Effective Date. Employee has seven (7) days after she signs this Agreement to revoke it. This Agreement will become effective on the eighth (8th) day after Employee signed this Agreement, so long as it has been signed by the Parties and has not been revoked by Employee before that date (the “Effective Date”). Employee understands that this Agreement shall be null and void if not executed by Employee within the twenty-one (21) day period set forth under paragraph 6 above.

31. Counterparts. This Agreement may be executed in counterparts and by facsimile, and each counterpart and facsimile shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned.

32. Press Release. The Company shall issue a press release regarding Employee’s transition and separation from the Company, the substance of which is attached hereto as Exhibit C.

33. Voluntary Execution of Agreement. Employee understands and agrees that she executed this Agreement voluntarily, without any duress or undue influence on the part or behalf of the Company or any third party, with the full intent of releasing all of her claims against the Company and any of the other Releasees. Employee acknowledges that:

a. she has read this Agreement;

b. she has been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of her own choice or has elected not to retain legal counsel;

c. she understands the terms and consequences of this Agreement and of the releases it contains; and

d. she is fully aware of the legal and binding effect of this Agreement.

[Remainder of Page Blank; Signature Page Follows]

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IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below.

		ERIN NELSON, an individual
Dated:	12/7/2012	/s/ Erin Nelson
		Erin Nelson
		BAZAARVOICE, INC.
Dated:	Dec. 7, 2012	By	/s/ Ryan Robinson
			Ryan Robinson
			Chief People Officer

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EXHIBIT A

SEPARATION AND RELEASE AGREEMENT

In consideration for the mutual promises and consideration provided both herein and in the Transition and Release Agreement signed on December     , 2012 (the “Transition Agreement”) between Erin Nelson (“Employee”) and Bazaarvoice, Inc. (the “Company”) (collectively the “Parties”), the Parties hereby extend by this Separation and Release Agreement (the “Agreement”) the release and waiver provisions therein to any and all claims that may have arisen between the execution date of the Transition Agreement and the Effective Date of this Agreement, and to add such releases and waivers as provided herein, expressly including but not limited to a waiver of any federal age related claims under the ADEA.

1. Consideration. As consideration for this Agreement and as set forth in the Transition Agreement, the Company agrees to pay Employee a lump sum of $1,000, less applicable withholding (the “Severance Amount”). The Severance Amount will be made within ten (10) days following the Effective Date of this Agreement. In no event shall the Severance Payment be made to Employee after March 31, 2013.

2. Release. The undersigned Parties expressly acknowledge and agree that the terms of the Transition Agreement shall apply equally to this Agreement, shall be construed to be extended through the Effective Date of this Agreement, and are incorporated by reference herein. Employee agrees that the foregoing consideration represents settlement in full of all outstanding obligations owed to Employee by the Company and its current and former officers, directors, employees, agents, investors, attorneys, shareholders, administrators, affiliates, benefit plans, plan administrators, insurers, divisions, and subsidiaries, and predecessor and successor corporations and assigns (collectively, the “Releasees”). Employee, on her own behalf and on behalf of her respective heirs, family members, executors, agents, and assigns, hereby and forever releases the Releasees from, and agrees not to sue concerning, or in any manner to institute, prosecute, or pursue, any claim, complaint, charge, duty, obligation, or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that Employee may possess against any of the Releasees arising from any omissions, acts, facts, or damages that have occurred up until and including the Effective Date of this Agreement.

3. Unknown Claims. Employee acknowledges that she has been advised to consult with legal counsel and that she is familiar with the principle that a general release does not extend to claims that the releaser does not know or suspect to exist in her favor at the time of executing the release, which, if known by him, must have materially affected her settlement with the releasee. Employee, being aware of said principle, agrees to expressly waive any rights she may have to that effect, as well as under any other statute or common law principles of similar effect.

4. ADEA Waiver. Employee acknowledges that she is waiving and releasing any rights she may have under the Age Discrimination in Employment Act of 1967 (“ADEA”), and that this waiver and release is knowing and voluntary. Employee agrees that this waiver and

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release does not apply to any rights or claims that may arise under the ADEA after the Effective Date of this Agreement. Employee acknowledges that the consideration given for this waiver and release is in addition to anything of value to which Employee was already entitled. Employee further acknowledges that she has been advised by this writing that: (a) she should consult with an attorney prior to executing this Agreement; (b) she has had twenty-one (21) days within which to consider this Agreement; (c) she has seven (7) days following her execution of this Agreement to revoke this Agreement; (d) this Agreement shall not be effective until after the revocation period has expired; and (e) nothing in this Agreement prevents or precludes Employee from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties, or costs for doing so, unless specifically authorized by federal law. In the event Employee signs this Agreement and returns it to the Company in less than the 21-day period identified above, Employee hereby acknowledges that she has freely and voluntarily chosen to waive the time period allotted for considering this Agreement. Employee acknowledges and understands that revocation must be accomplished by a written notification to Kathy Smith-Willman, Director of People Relations that is received prior to the Effective Date. The Parties agree that changes to this Agreement, whether material or immaterial, do not restart the running of the 21-day consideration period referenced above.

5. Effective Date. Employee has seven (7) days after she signs this Agreement to revoke it. This Agreement will become effective on the eighth (8th) day after Employee signed this Agreement, so long as it has been signed by the Parties and has not been revoked (the “Effective Date”).

6. Voluntary Execution. Employee understands and agrees that she executed this Agreement voluntarily, without any duress or undue influence on the part or behalf of the Company or any third party, with the full intent of releasing all of her claims against the Company and any of the other Releasees. Employee acknowledges that: (a) she has read this Agreement; (b) she has been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of her own choice or has elected not to retain legal counsel; (c) she understands the terms and consequences of this Agreement and of the releases it contains; and (d) she is fully aware of the legal and binding effect of this Separation Agreement.

7. Entire Agreement. This Separation Agreement, together with the Transition Agreement referenced herein (and any agreements survived thereunder), represents the entire agreement and understanding between the Company and Employee concerning the subject matter of this Agreement and Employee’s employment with the Company, transition of employment, and separation from employment with the Company and the events leading thereto and associated therewith, and supersedes and replaces any and all prior agreements and understandings concerning the subject matter of this Agreement and Employee’s relationship with the Company.

8. Governing Law. This Agreement shall be governed by the laws of the State of Texas, without regard for choice-of-law provisions. Both Parties consent to personal and exclusive jurisdiction and venue in the State of Texas.

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IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below.

	ERIN NELSON, an individual
Dated:
	Erin Nelson
	BAZAARVOICE, INC.
Dated:	By
	Name
	Title

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EXHIBIT B

EXTERNAL COMMUNICATION POLICY

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Adopted by the Board of Directors: February 13, 2012

Effective: Upon the effectiveness of the registration

statement related to Company’s initial public offering

Bazaarvoice, Inc.

External Communications Policy

Introduction

This External Communications Policy (the “Policy”) sets forth the policies of Bazaarvoice, Inc. (the “Company”) regarding how representatives of the Company may communicate with outside parties, particularly securities market professionals and those who may own or trade in our stock. Certain terms used in this Policy have the meanings set forth in the section entitled “Key Terms” below.

General Policy

It is the Company’s policy that all of its communications with Third Parties comply with applicable law, including Regulation FD promulgated under the Securities Exchange Act of 1934.

Only a Spokesperson may engage in discussions about the Company with Third Parties. No other individual is authorized to speak on behalf of the Company. Any other Insider who is contacted by a Third Party must refer the Third Party to a Spokesperson.

Specifically, no Insider, other than a Spokesperson, may communicate any information that could be considered Material, Nonpublic Information of the Company to a Third Party. A Spokesperson may only provide Material, Nonpublic Information to a Third Party if such information has been previously or is simultaneously disclosed in a manner reasonably intended to provide broad, non-exclusionary distribution of the information to the public. This will typically be a press release or conference call that is open to the public.

In the event of non-intentional disclosure by an Insider of information that might be Material Information, the Insider must immediately inform a Spokesperson and the General Counsel of the Company, who, in turn, may consult with outside corporate counsel as to whether prompt public dissemination of this information is required. If required, the information must be Publicly Disseminated within 24 hours of the inadvertent disclosure.

Whenever a Spokesperson is uncertain about this Policy, Regulation FD or the federal securities laws, the Spokesperson should consult with counsel to ensure compliance.

A Spokesperson may not depart from the principles set forth in this Policy without the explicit, prior written approval of two of the following individuals: the Chief Executive Officer, President, Chief Financial Officer and the General Counsel. Violation of this Policy may constitute grounds for termination of employment.

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Financial Information

No Insider may provide “guidance” to Third Parties on a selective basis, directly or indirectly, and no Insider may disclose to Third Parties any information regarding the Company’s internal projections of future operating results, business transactions, customer or supplier developments or other Material Information that has not been Publicly Disseminated. Additionally, no Insider shall comment on past guidance, if any past guidance exists, even though it has been Publicly Disseminated. For example, if a Third Party asks, “How does the Company feel about its initial guidance?” or “Is The Company’s initial guidance still correct?” an Insider should refer such inquiry to the Spokesperson, who, in turn, should state that, due to Regulation FD, he or she cannot comment. However, if a Third Party asks, “What revenue and earnings targets did the Company provide in its last conference call?” an Insider should refer such inquiry to the Spokesperson, who may disclose such information, but only after reminding the Third Party that the information represented management’s views as of the original date of the conference call, and should not be relied upon as representing management’s views as of any subsequent date. The information provided in response to the Third Party’s inquiry should contain the following statements: (a) a statement that the information is forward-looking, and it is possible that actual results will differ materially, (b) a reference to the “risk factors” section of the Company’s most recent filing with the Securities and Exchange Commission (the “SEC”), (c) a statement that Company is not re-confirming or updating the information presented, and (d) a statement that the Company is under no obligation to update this information to reflect events or circumstances after the original date of the conference call.

Analyst Information

Except as set forth below, no Insider may review analysts’ reports prior to their being published, send analysts’ reports to investors or prospective investors, comment on an analyst’s model, provide analysts’ phone numbers for people to call them directly, endorse or ratify revenue or earnings projections made by an analyst, or express comfort or disagreement with “the range” or how the analysts arrived at their estimates. The Chief Financial Officer, or his or her designate, may, however, review an analyst report solely for the purpose of confirming or correcting Publicly Disseminated information that may be contained in such analyst report. In the event any such meetings are not webcast, the Company’s General Counsel or Vice President of Communications, or their designee, shall attend such meeting, in addition to the Chief Financial Officer, and shall take notes on such meeting.

Press Releases

The Company will issue press releases from time to time to disclose information that is important or of use to the public. Press releases will be prepared and reviewed in accordance with the Company’s established practices, including review by the Company’s auditors and counsel, if appropriate. All press releases must be approved by and issued under the supervision of a Spokesperson.

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Services and Company Information

No Insider shall disclose to Third Parties any Material, Nonpublic Information regarding the Company or its products, services, or other offerings.

Stock Price

No Insider shall comment on how the Company’s stock price will change over time, on whether people should buy or sell the Company’s stock or whether he or she believes that the stock reacted or will react to a particular event (e.g., product or service offering, business transaction, a Company press release, etc.).

Competitor Information

No Insider shall discuss financial or operational information about competitors with Third Parties. If asked about competitors, a Spokesperson should say that the Company does not comment about its competitors and suggest that the Third Party contact the competitor directly.

A Spokesperson may discuss market share figures and facts from competitors’ earnings announcements.

Rumors

No Insider may comment on rumors. A Spokesperson shall be permitted to state that the Company has a policy against commenting on rumors.

Indirect Communications; Chat Rooms

Any communication that would constitute a violation of this Policy if made directly by an Insider to a Third Party shall also constitute a violation if made indirectly to a Third Party. This includes, but is not limited to, communications made by means of electronic forums such as a chat room or other online communication by which a Third Party receives such information indirectly.

Violation of this Policy

Selective disclosure of Material, Nonpublic Information in any forum other than the approved methods listed above, and by any individual other than a Spokesperson, and without the express approval of the Chief Executive Officer, President, Chief Financial Officer or General Counsel is considered a violation of this Policy and may be considered a violation of Regulation FD under the Securities Exchange Act of 1934. A violation of this Policy may result in discipline, up to and including immediate termination of employment and, potentially, an SEC civil enforcement action against the individual offender, the Company, and its officers and directors.

Key Terms

As used in this Policy, the following terms have the following meanings:

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“Insider” means an employee, officer, director, consultant or contractor of the Company.

“Material Information”: Information should be regarded as material if there is a substantial likelihood that a reasonable investor would consider it important in deciding whether to buy, hold or sell securities or would view the information as significantly altering the total mix of information in the marketplace about the issuer of the security. In general, any information that could reasonably be expected to affect the market price of a security is likely to be material. Either positive or negative information may be material.

It is not possible to define all categories of “material” information. However, some examples of information that could be regarded as material include information with respect to:

• financial results, financial condition, earnings pre-announcements, guidance, projections or forecasts, particularly if inconsistent with the Company’s guidance or the expectations of the investment community;

• restatements of financial results, or material impairments, write-offs or restructurings;

• changes in independent auditors, or notification that the Company may no longer rely on an audit report;

• business plans or budgets;

• creation of significant financial obligations, or any significant default under or acceleration of any financial obligation;

• impending bankruptcy or financial liquidity problems;

• significant developments involving business relationships, including execution, modification or termination of significant agreements or orders with customers, suppliers, distributors, manufacturers or other business partners;

• product or service introductions, modifications or performance issues or significant pricing changes or other product or service announcements of a significant nature;

• significant developments in research and development or relating to intellectual property;

• significant legal or regulatory developments, whether actual or threatened;

• major events involving the Company’s securities, including calls of securities for redemption, adoption of stock repurchase programs, option repricings, stock splits, changes in dividend policies, public or private securities offerings, modification to the rights of security holders or notice of delisting;

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• significant corporate events, such as a pending or proposed merger, joint venture or tender offer, a significant investment, the acquisition or disposition of a significant business or asset or a change in control of the company;

• the existence of a special blackout period; and

• major personnel changes, such as changes in management or lay-offs.

“Material, Nonpublic Information” means Material Information that has not been previously disclosed to the general public and is otherwise not available to the general public.

“Publicly Disseminated” means that information has been made available through the distribution of a press release through a widely disseminated news or wire service, by filing a Form 8-K, or by another non-exclusionary method of disclosure that is reasonably designed to provide broad public access — such as announcement at a conference of which the public had notice and to which the public was granted access, either by personal attendance, or telephonic or electronic access.

“Spokesperson” means the Chief Executive Officer, President, Chief Financial Officer, General Counsel and Vice President of Corporate Communications, or another Company employee or representative who has been authorized by the Chief Executive Officer or Chief Financial Officer to speak with a Third Party with respect to a particular topic or on a particular occasion.

“Company” means Bazaarvoice, Inc. and its subsidiaries and affiliates.

“Third Party” means securities market professionals (including, but not limited to, analysts, broker-dealers, investment advisers and fund managers), existing or prospective stockholders (including individuals, entities or anyone else who may be reasonably expected to trade on the basis of Material, Nonpublic Information), reporters and any other party who is not bound by a duty of confidentiality to the Company.

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EXHIBIT C

PRESS RELEASE

Bazaarvoice Names Lisa Pearson Executive Vice President of Marketing

AUSTIN, Texas – Dec 7, 2012 – Bazaarvoice today announced the appointment of Lisa Pearson as Executive Vice President of Bazaarvoice Marketing. In her new role, Pearson will report to CEO Stephen Collins, and will be responsible for driving overall marketing strategy and execution across the globe.

“We have continued to grow and expand our reach, preference and capabilities across the globe, and our Marketing organization has been a cornerstone of our progress,” said Mr. Collins. “Lisa’s deep marketing expertise, proven track record and inspirational leadership make her the right executive to continue growing our brand and our business.”

Ms. Pearson was previously the Vice President of Bazaarvoice Brand Marketing, where she led brand strategy, media relations, analyst relations and field enablement. She joined Bazaarvoice after 20 years in the marketing industry, including leadership roles at global agencies DeVries and Euro RSCG, where she led work for clients including Procter & Gamble, Johnson & Johnson, American Express, IBM, Sprint PCS and many others.

“Social and digital have reshaped the way that consumers engage with brands,” said Pearson. “Marketing is at an inflection point, and the path forward is placing customers at the center of every business decision. I am excited to work alongside our clients to innovate new ways to use the real voices of consumers to drive business change.”

Ms. Pearson succeeds Erin Mulligan Nelson, who held the Chief Marketing Officer role at Bazaarvoice since joining the company in 2010, and who has announced she will be leaving the company to pursue other ventures. As the Chief Marketing Officer, Ms. Nelson oversaw significant gains in brand penetration, partner growth and influencer advocacy and revenue growth. Ms. Nelson will stay on with the company through March to ensure a seamless transition.

“Erin leaves an important legacy at Bazaarvoice. Her leadership, vision and commitment to customers helped shape our strategy and I know Erin will be successful in her future endeavors,” said Mr. Collins.

“I’m proud of what we have accomplished at Bazaarvoice, and there’s still more to come.” said Ms. Nelson. “Lisa is an amazing leader and I know she and the team will continue to build on the foundation we’ve created. I look forward to seeing the team and the business grow and prosper.”

About Bazaarvoice

BOILERPLATE

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EX-10.3

Exhibit 10.3

January 23, 2013

Jim Offerdahl

Austin, TX 78731

RE: Offer of Employment

Dear Jim,

On behalf of Bazaarvoice, Inc. (the “Company”), I am pleased to invite you to join the Company as Chief Financial Officer reporting to Stephen Collins, Chief Executive Officer. Subject to Section 7(b), you will be expected in this position to devote your full business time, attention and energies to the performance of your duties with the Company. If you accept our offer of employment by complying with the instructions set forth in the last paragraph of this offer, your first day of employment is to be determined. The terms of this offer of employment are as follows:

1. At-Will Employment. You should be aware that your employment with the Company is for no specified period and constitutes “at-will” employment. As a result, you are free to terminate your employment at any time, for any reason or for no reason. Similarly, the Company is free to terminate your employment at any time, for any reason or for no reason.

2. Office Location. Your primary office location will be in our Austin, TX Office located at 3900 N. Capital of Texas Hwy., Suite 300, Austin, TX 78731.

3. Compensation. The Company will pay you a base salary at a rate of $22,916.67 per month (annualized to $275,000 per year) in accordance with the Company’s standard payroll policies, including compliance with applicable withholding requirements.

Offerdahl, Jim - CFO

Key Executive Bonus Plan: In addition to your base salary, you will be eligible to participate in an annual Key Executive Bonus Plan (effective May 1, 2013 for FY’14) to be adopted each fiscal year that sets your targeted bonus amount to be paid upon achievement of defined goals for the company and you. In your initial year of employment, your targeted annual bonus will be $137,500 at 100% achievement, pro-rated from your date of hire. The first and last payment by the Company to you will be adjusted, if necessary, to reflect the commencement or termination date other than the first or last working day of a pay period.

Sign-on Bonus: The Company will pay you a sign-on bonus of $50,000 on the first regular payroll after your start date and in accordance with the Company’s standard payroll policies, including compliance with applicable withholding requirements. Should you voluntarily leave the company within one-year of your start date, you will be required to repay a pro-rated portion of the sign-on bonus.

4. Stock Ownership.

(a) Stock Options: Subject to approval by the Company’s Board of Directors, you will be granted an option under the Company’s 2012 Equity Incentive Plan to purchase 275,000 shares of the Company’s common stock at a price per share equal to the fair market value of the common stock on the date upon which the Board of Directors approves the option grant. We will recommend that the Company’s Board of Directors set your vesting schedule with respect to such option as follows: One-fourth ( ¹/₄th) of the shares subject to the

Offerdahl, Jim - CFO

option will vest on the first anniversary of your employment with the Company and an additional one forty-eighth (1/48th) of the total number of such shares will vest on the corresponding day of each month thereafter, subject to your continued employment with the Company on any such date; provided, however, that in the event of a Termination Upon Change of Control (as defined on Exhibit A hereto), all of the then-unvested shares subject to such option shall immediately vest.

(b) Restricted Stock Units: Subject to the approval by the Company’s Board of Directors, you will be granted a restricted stock unit under the Company’s 2012 Equity Incentive Plan for 50,000 shares of the Company’s common stock. We will recommend that the Company’s Board of Directors set your vesting schedule with respect to such restricted stock units as follows: Twenty-five percent (25%) of the total number of units will vest on the first day of the first calendar quarter following the first anniversary of your date of hire (e.g., if your date of hire is January 15, 2013, the first installment would vest on April 1, 2014) and an additional twenty-five percent (25%) of the total number of units will vest on the corresponding date of each year thereafter, subject to your continued employment with the Company on each such date; provided, however, that in the event of a Termination Upon Change of Control (as defined on Exhibit A hereto), all of the then-unvested units subject to such grant shall immediately vest. This restricted stock unit will be granted pursuant to a Restricted Stock Unit Award Agreement to be entered into between you and the Company.

5. Benefits. During the term of your employment, you will be entitled to the Company’s standard vacation and benefits covering employees at your level, as such may be in effect from time to time.

Offerdahl, Jim - CFO

6. Immigration Laws. For purposes of federal immigration laws, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided within three business days of the effective date of your employment, or your employment relationship with the Company may be terminated.

7. Prior Employment Relationships; Conflicting Obligations.

(a) If you have not already done so, we request that you disclose to the Company any and all agreements relating to your prior employment that may affect your eligibility to be employed by the Company or limit the manner in which you may be employed. It is the Company’s understanding that any such agreements will not prevent you from performing the duties of your position and you represent that such is the case. Moreover, you agree that, during the term of your employment with the Company, you will not engage in any other employment, occupation, consulting or other business activity directly related to the business in which the Company is now involved or becomes involved during the term of your employment, nor will you engage in any other activities that conflict with your obligations to the Company. Similarly, you agree not to bring any third party confidential information to the Company, including that of your former employer, and that in performing your duties for the Company you will not in any way utilize any such information.

(b) Notwithstanding the foregoing, the Company acknowledges your directorships on the boards of directors of the companies identified on Exhibit C and agrees that you may continue such directorships unless the Board of Directors of the Company concludes in its reasonable discretion that such companies have become competitors of the Company or that your service on such boards of directors conflicts with your obligations to the Company.

Offerdahl, Jim - CFO

8. Employee Proprietary Information Agreement. As a condition of this offer of employment, you will be required on your first day of employment to complete and sign the Company’s standard form of Employee Proprietary Information Agreement (the “EPIA”) attached hereto as Exhibit B.

9. General. This offer letter, the Termination Upon Change of Control, EPIA, the Stock Option Agreement and the Restricted Stock Unit Award Agreement covering the shares described in paragraph 4, when signed by you, set forth the terms of your employment with the Company and supersede any and all prior representations and agreements, whether written or oral. In the event of a conflict between the terms and provisions of this offer letter, on the one hand, and the Termination Upon Change of Control, EPIA, the Stock Option Agreement and the Restricted Stock Unit Award Agreement, on the other hand, the terms and provisions of the Termination Upon Change of Control, EPIA, the Stock Option Agreement and the Restricted Stock Unit Award Agreement will control; provided, however, that nothing in such agreements shall be deemed to modify your rights under Section 7(b) above. Any amendment of this offer letter or any waiver of a right under this offer letter must be in a writing signed by you and an officer of the Company. This offer letter will be governed by Texas law without giving effect to its conflict of law principles.

10. Background Check; Contingencies. This offer of employment is contingent upon the satisfactory completion of background screens to be performed by the Company and/or independent contractors of the Company. If such checks fail to satisfy the Company’s requirements for employees at your level, this offer of employment shall be rescinded.

Offerdahl, Jim - CFO

11. Section 409A. It is the intent of this letter that all payment and benefits hereunder comply with or be exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and the final regulations and any guidance promulgated thereunder and any applicable state law requirements (“Section 409A”) so that none of the payments and benefits to be provided under this letter will be subject to the additional tax imposed under Section 409A, and any ambiguities or ambiguous terms herein will be interpreted to be exempt or so comply. Each payment and benefit payable under this letter is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations. You and the Company agree to work together in good faith to consider amendments to this letter and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to you under Section 409A.

Notwithstanding anything herein to the contrary, the reimbursement of expenses or in-kind benefits provided pursuant to this letter agreement shall be subject to the following conditions: (1) the expenses eligible for reimbursement or in-kind benefits in one taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits in any other taxable year; (2) the reimbursement of eligible expenses or in-kind benefits shall be made the earliest of (i) the date called for under Company’s applicable policies, (ii) the time provided by this Agreement, and (iii) the end of the year after the year in which such expense was incurred; and (3) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit.

Offerdahl, Jim - CFO

We look forward to you joining the Company. If the foregoing terms are agreeable, please indicate your acceptance by signing this offer letter in the space provided below and returning it to me not later than January 25, 2013.

Sincerely,

BAZAARVOICE, INC.

Kathy Smith -Willman,

Director – People Relations

Agreed and Accepted by:

Signature:	/s/ Jim Offerdahl
Date:	Jan. 23, 2013

Offerdahl, Jim - CFO

EXHIBIT A

CHANGE OF CONTROL

Offerdahl, Jim - CFO

EXHIBIT B

EMPLOYEE PROPRIETARY INFORMATION AGREEMENT

Offerdahl, Jim - CFO

EXHIBIT C

DIRECTORSHIPS

CBG Holdings, Inc.

Fuelquest, Inc.

Offerdahl, Jim - CFO

EX-10.4

Exhibit 10.4

January 7, 2013

Stephen Collins

Re: Terms of Employment

Dear Stephen:

On behalf of Bazaarvoice, Inc. (the “Company”), I am pleased to write to confirm the terms of your employment effective as of November 4, 2012 as the President and CEO of the Company as set forth in this letter, reporting to the Company’s Board of Directors (the “Board”). It is anticipated that you will remain in your role as the CFO of the Company until such date that a suitable successor is identified and appointed to that role. Subject to and effective from the date of your acceptance, the terms of your employment with the Company will be as follow:

1. At-Will Employment. You should be aware that your employment with the Company is for no specified period and constitutes “at-will” employment. As a result, you are free to terminate your employment at any time, for any reason or for no reason. Similarly, the Company is free to terminate your employment at any time, for any reason or for no reason.

2. Compensation. The Company will pay you a base salary at a rate of $28,333.33 per month (annualized to $340,000.00 per year) in accordance with the Company’s standard payroll policies, including compliance with applicable withholding requirements (“Base Salary”). In addition to your Base Salary, you will be eligible to participate in an annual executive bonus plan adopted each fiscal year that sets your target bonus amount to be paid upon achievement of defined goals for the company and you. For fiscal year 2013, your targeted annual bonus will be $272,000 at 100% achievement, representing 80% of your Base Salary. The first and last payment by the Company to you will be adjusted, if necessary, to reflect a commencement or termination date other than the first or last working day of a pay period.

3. Stock Ownership.

(a) Stock Options. In addition to the equity awards granted to you prior to your appointment as President and CEO (the “Prior Equity Awards”), in connection with your acceptance of these roles, on November 4, 2012 the Board approved the following stock options under the Company’s 2012 Equity Incentive Plan: (i) an option to purchase 800,000 shares of the Company’s common stock subject to time-based vesting as described below (the “Time-Based Option”), and (ii) an option to purchase 100,000 shares of the Company’s common stock subject to performance-based vesting as described below (the “Performance-Based Vesting”), in each case at $12.60 per share, which was equal to the most recent closing market price on the date upon which the Board approved the option grants.

(b) Time-Based Vesting. The vesting schedule with respect to the Time-Based Option is as follows: One-fourth ( ¹/₄th) of the shares subject to the option will vest on the first anniversary of your appointment as CEO on November 4, 2012 and an additional one forty-eighth (1/48th) of the total number of such shares will vest each month thereafter, subject to your continued employment with the Company on any such date.

Stephen Collins

January 7, 2013

Page 2 of 6

(c) Performance-Based Vesting. The vesting schedule with respect to the Performance-Based Option is to be based on performance metrics for the remainder of fiscal year 2013 that are to be agreed between you and the Board, which shall be based on the metrics used for the Company’s annual executive bonus plan for fiscal year 2013, with such adjustments as may be mutually agreed. The Performance-Based Option will vest on the same schedule described above for the Time-Based Option, subject to the satisfaction of the performance metrics.

(d) Stock Option Agreements. Each of these stock options will be granted pursuant to Stock Option Agreements to be entered into between you and the Company.

(e) Vesting Acceleration. In the event of a Change of Control (as defined in Exhibit A attached hereto), fifty percent (50%) of the total number of shares subject to the Time-Based Option and the Performance-Based Option shall immediately vest and become exercisable, and in the event of your Termination Upon Change of Control (as defined in Exhibit A attached hereto), one hundred percent (100%) of the total number of shares subject to the Time-Based Option and the Performance-Based Option shall be deemed vested and exercisable.

4. Severance Benefits. In the event that your employment with the Company is terminated, you will be entitled to receive certain severance benefits. The Company’s severance obligations, and the terms and conditions of such severance obligations are set forth in Exhibit A, which is incorporated into this letter agreement and attached hereto.

5. Benefits. During the term of your employment, you will be entitled to the Company’s standard vacation and benefits covering employees at your level, as such may be in effect from time to time.

6. Prior Employment Relationships; Conflicting Obligations. If you have not already done so, we request that you disclose to the Company any and all agreements relating to your prior employment that may affect your eligibility to be employed by the Company or limit the manner in which you may be employed. It is the Company’s understanding that any such agreements will not prevent you from performing the duties of your position and you represent that such is the case. Moreover, you agree that, during the term of your employment with the Company, you will not engage in any other employment, occupation, consulting or other business activity directly related to the business in which the Company is now involved or becomes involved during the term of your employment, nor will you engage in any other activities that conflict with your obligations to the Company. Similarly, you agree not to bring any third party confidential information to the Company, including that of your former employer, and that in performing your duties for the Company you will not in any way utilize any such information.

6. Employee Proprietary Information Agreement. You acknowledge and agree that you have completed and signed the Company’s standard form of Employee Proprietary Information Agreement (the “EPIA”) and that such EPIA remains in effect.

7. General. This letter agreement and the Stock Option Agreements covering the shares described in paragraph 3, when signed by you, the EPIA and the agreements evidencing the Prior Equity Awards, collectively, set forth the terms of your employment with the Company and supersede any and all prior representations and agreements, whether written or oral, including the offer letter you entered into with the Company dated August 13, 2010. In the event of a conflict between the terms and provisions of this letter agreement, on the one hand, and the EPIA, the Stock Option Agreements or the agreements evidencing the Prior Equity Awards, on the other hand, the terms and provisions of the EPIA, the Stock Option Agreements and such agreements evidencing the Prior Equity Awards will control. Any amendment of this letter agreement or any waiver of a right under this letter agreement must be in a writing signed by you

Stephen Collins

January 7, 2013

Page 3 of 6

and the Chairman of the Board or the Chairman of the Compensation Committee of the Board. The headings used in this letter agreement have been inserted for convenience of reference only and do not define or limit the provisions hereof. THIS LETTER AGREEMENT WILL BE GOVERNED BY TEXAS LAW WITHOUT GIVING EFFECT TO ITS CONFLICT OF LAW PRINCIPLES. EACH PARTY HERETO CONSENTS AND SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF TEXAS IN AND FOR THE COUNTY OF TRAVIS AND THE COURTS OF THE UNITED STATES LOCATED IN THE WESTERN DISTRICT OF TEXAS FOR THE ADJUDICATION OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR OTHERWISE RELATING TO THIS LETTER AGREEMENT. This letter agreement may be executed in any number of counterparts and by facsimile, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

If the foregoing terms are agreeable, please indicate your acceptance by signing this letter agreement in the space provided below and returning it to me not later than December 17, 2012.

Sincerely,
BAZAARVOICE, INC.
By:	/s/ Edward Keller
	Edward Keller,
	Chairman of the Compensation Committee

Agreed and Accepted:

Signature:	/s/ Stephen Collins
Date:	1/16/13

Stephen Collins

January 7, 2013

Page 4 of 6

EXHIBIT A

1. Severance.

(a) As set forth in the accompanying letter agreement, you and the Company shall be entitled to terminate your employment with the Company at any time, for any or no reason. Upon your termination of employment, you shall be entitled to the following:

(i) if the Company terminates your employment for Cause, if you resign without Good Reason, or if your employment is terminated due to death or Disability, you shall be entitled to (A) your Base Salary through the date of termination; (B) reimbursement of all expenses, including travel, for which you are entitled to be reimbursed pursuant to the Company’s current expense reimbursement policy, but for which you have not yet been reimbursed; and (C) no other severance or benefits of any kind, except as set forth below or as otherwise required by law or pursuant to any written Company plans or policies, as then in effect;

(ii) [intentionally omitted]; and

(iii) in the event of a Termination Upon Change of Control, then, in addition to the benefits described in Section 1(a)(i) above, subject to the limitations of Section 1(b) and Section 2 of this Exhibit A, you shall be entitled to receive severance payments in an aggregate amount equal to twelve (12) months of your then-current Base Salary, to be paid in twelve (12) equal monthly installments beginning on the Company’s first regular payroll date following the effective date of the release described in Section 1(c) below (except as otherwise provided in paragraph 1(c)), in accordance with the Company’s regular payroll practices, and shall be less applicable withholding.

(b) Conditions Precedent. Any severance payments contemplated by Section 1(a)(ii) above are conditional on your: (i) continuing to comply with the terms of the accompanying letter agreement and the EPIA; and (ii) complying with the release requirements of Section 1(c) below. Notwithstanding the foregoing, this Section 1(b) shall not limit your ability to obtain expense reimbursements pursuant to the Company’s current expense reimbursement policy or benefits otherwise required by law or in accordance with written Company plans or policies, as then in effect.

(c) Separation Agreement and Release of Claims. The receipt of any severance pursuant to Section 1(a)(ii) or Section 1(a)(iii) of this Exhibit A will be subject to your signing and not revoking a separation agreement including a general release of claims relating to your employment and/or the accompanying letter agreement and this Exhibit A against the Company or its successor, its subsidiaries and their respective directors, officers and stockholders and affirmation of obligations hereunder and under the EPIA in a form reasonably satisfactory to the Company or its successor (the “Release”) and provided that such Release becomes effective and irrevocable no later than sixty (60) days following the termination date (such deadline, the “Release Deadline”). If the Release does not become effective and irrevocable by the Release Deadline, you will forfeit any rights to severance or benefits under this letter. In no event will severance payments or benefits be paid or provided until the Release becomes effective and irrevocable. Notwithstanding anything to the contrary in this Agreement, in the event that your termination occurs at a time during the calendar year where it would be possible for the Release to become effective in the calendar year following the calendar year in which your termination occurs, any severance that would be considered Deferred Payments (as defined in Section 3 of this Exhibit A) will be paid on the first payroll date to occur during the calendar year following the calendar year in which such termination occurs, or, if later, (1) the Release Deadline, (ii) such time as required by the payment schedule applicable to each severance benefit, or (iii) such time as required by Section 3 of this Exhibit A.

Stephen Collins

January 7, 2013

Page 5 of 6

2. Definitions. The following terms shall have the meaning ascribed to each such term:

(a) “Termination Upon Change of Control” means any termination of your employment by the Company without Cause or as a result of your resignation with Good Reason during the period commencing on or after the date that the Company has signed a definitive agreement or that the Company’s board of directors has endorsed a tender offer for the Company’s stock that in either case when consummated would result in a Change of Control (even though consummation is subject to approval or requisite tender by the Company’s stockholders and other conditions and contingencies) and ending at the earlier of the date on which such definitive agreement or tender offer has been terminated without a Change of Control or on the date which is twelve (12) months following the consummation of any transaction or series of transactions that results in a Change of Control.

(b) “Cause” means (i) your willful and continued failure to perform substantially your duties with the Company (other than any such failure resulting from your Disability), (ii) any act of personal dishonesty, fraud or misrepresentation taken by you which was intended to result in substantial gain or personal enrichment for you at the expense of the Company, (iii) the willful engaging by you in illegal conduct or gross misconduct which is or is reasonably likely to be injurious to the Company; (iv) your conviction of, or plea of nolo contendere or guilty to, a felony under the laws of the United States or any State; (v) your breach of the terms of your agreement(s) with the Company relating to proprietary information and inventions assignment, including your EPIA; or (vi) your material breach of the terms of this letter. For purposes of this letter, clauses (i), (v) and (vi) shall constitute “Cause” only after you have received from the Board written notice describing the circumstances of such breach or failure in reasonable detail and have been given a reasonable cure period of not less than thirty (30) days.

(c) “Change of Control” means (a) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than a trustee or other fiduciary holding securities of the Company under an employee benefit plan of the Company, becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of (A) the outstanding shares of common stock of the Company or (B) the combined voting power of the Company’s then-outstanding securities; (b) the Company is party to a merger or consolidation, or series of related transactions, which results in the voting securities of the Company outstanding immediately prior thereto failing to continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving or another entity) at least fifty (50%) percent of the combined voting power of the voting securities of the Company or such surviving or other entity outstanding immediately after such merger or consolidation; (c) the sale or disposition of all or substantially all of the Company’s assets (or consummation of any transaction, or series of related transactions, having similar effect), unless at least fifty (50%) percent of the combined voting power of the voting securities of the entity acquiring those assets is held by persons who held the voting securities of the Company immediate prior to such transaction or series of transactions; (d) the dissolution or liquidation of the Company, unless after such liquidation or dissolution all or substantially all of the assets of the Company are held in an entity at least fifty (50%) percent of the combined voting power of the voting securities of which is held by persons who held the voting securities of the Company immediately prior to such liquidation or dissolution; or (e) any transaction or series of related transactions that has the substantial effect of any one or more of the foregoing.

(d) “Disability” means that you, at the time notice is given, have been unable to substantially perform your duties under the accompanying letter agreement for not less than one-hundred and twenty (120) work days within a twelve (12) consecutive month period as a result of your incapacity due to a physical or mental condition and, if reasonable accommodation is required by law, after any reasonable accommodation.

(e) “Good Reason” refers to the existence or occurrence of the following, provided in each case that your resignation occurs within thirty (30) days after the original occurrence of such event: (i) a change in your position with the Company or a successor entity that materially reduces your position, title, duties and responsibilities or the level

Stephen Collins

January 7, 2013

Page 6 of 6

of management to which you report; (ii) a material reduction in your total compensation and benefits package (including base salary, fringe benefits and target bonus under any corporate-performance based bonus or incentive programs as established from time to time) (provided, that, for the avoidance of doubt, the Time-Based Option and the Performance-Based Option shall not be deemed compensation or benefits for purposes of this definition); or (iii) a relocation of your place of employment by more than fifty (50) miles from the Company’s current offices in Austin, Texas; provided, however, an event described in clauses (i), (ii) or (iii) of this paragraph shall give rise to Good Reason if and only if such change, reduction or relocation is effected without your consent.

3. Section 409A. The Company intends that all severance payments made under this letter comply with, or be exempt from, the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and any guidance promulgated thereunder (“Section 409A”) so that none of the payments or benefits will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. If, at the time of your termination of employment, you are a “specified employee” within the meaning of Section 409A and the severance benefits payable under this letter, when considered together with any other severance payments or separation benefits, are considered deferred compensation under Section 409A (together, the “Deferred Payments”), payment of such Deferred Payments will be delayed to the extent necessary to avoid the imposition of the additional tax imposed under Section 409A, which generally means that you will receive payment on the first payroll date that occurs on or after the date that is six (6) months and one (1) day following your termination of employment. You and the Company agree to work together in good faith to consider amendments to this letter and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to you under Section 409A. In no event will the Company reimburse you for any taxes that may be imposed on you as a result of Section 409A.

4. Notices. All notices, requests, and other communications hereunder must be in writing and will be deemed to have been duly given only if (i) delivered personally or by overnight courier, (ii) delivered by facsimile transmission with delivery confirmation, or (iii) mailed (postage prepaid by certified or registered mail, return receipt requested) (effective three business days following mailing) to you at the address set forth on the first page hereof or to the Company at the Company’s then-current principal executive office. An electronic communication (“Electronic Notice”) shall be deemed written notice for purposes of this letter if sent with return receipt requested to the electronic mail address specified by the receiving party. Electronic Notice shall be deemed received at the time the party sending Electronic Notice receives verification of receipt by the receiving party. Any party receiving Electronic Notice may request and shall be entitled to receive the notice on paper, in a nonelectronic form (“Nonelectronic Notice”) which shall be sent to the requesting party within five (5) days after receipt of the written request for Nonelectronic Notice. Any party from time to time may change its address, facsimile number, electronic mail address, or other information for the purpose of notices to that party by giving written notice specifying such change to the other party hereto.

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13A-14(A) OF THE SECURITIES EXCHANGE ACT OF 1934

I, Stephen R. Collins, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Bazaarvoice, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) [Reserved];

(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the company’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 14, 2013

/s/ Stephen R. Collins

 Stephen R. Collins

 President and Chief Executive Officer

 (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13A-14(A) OF THE SECURITIES EXCHANGE ACT OF 1934

I, James R. Offerdahl, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Bazaarvoice, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) [Reserved];

(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the company’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 14, 2013

/s/ James R. Offerdahl

 James R. Offerdahl

 Chief Financial Officer

 (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Bazaarvoice, Inc. (the “Company”) on Form 10-Q for the period ended January 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Stephen R. Collins, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 14, 2013

/s/ Stephen R. Collins

Stephen R. Collins

President, Chief Executive Officer 

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Bazaarvoice, Inc. (the “Company”) on Form 10-Q for the period ended January 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James R. Offerdahl Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 14, 2013

/s/ James R. Offerdahl

James R. Offerdahl

Chief Financial Officer

XML

Computations of Loss per Share Applicable to Common Stockholders (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended				9 Months Ended
	Jan. 31, 2013		Jan. 31, 2012		Jan. 31, 2013		Jan. 31, 2012
Schedule Of Computation Of Basic And Diluted Earnings Per Common Share [Line Items]
Net loss	$ (10,827)		$ (6,575)		$ (40,608)		$ (17,962)
Less accretion of redeemable convertible preferred stock			(10)				(35)
Net loss applicable to common stockholders	$ (10,827)		$ (6,585)		$ (40,608)		$ (17,997)
Net loss per share applicable to common stockholders, basic and diluted	$ (0.15)		$ (0.34)		$ (0.60)		$ (0.93)
Weighted average number of shares outstanding, basic and diluted	71,940		19,613		68,115		19,284
Potentially dilutive securities:
Outstanding stock options	4,435	[1]	5,597	[1]	6,786	[1]	5,381	[1]
Redeemable convertible preferred shares			27,897	[1]			27,897	[1]

[1] These securities were excluded from the computation of diluted net loss per share applicable to common stockholders because the effect would be anti-dilutive.

XML

Goodwill - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	Jan. 31, 2013
Goodwill [Line Items]
Goodwill	$ 141,833

XML

Net Loss Per Share Applicable to Common Stockholders (Tables)

9 Months Ended

Jan. 31, 2013

Computations of Loss per Share Applicable to Common Stockholders

The following table sets forth the computations of net loss per share applicable to common stockholders for the three and nine months ended January 31, 2013 and 2012, respectively (in thousands, except net loss per share data).

	Three Months  Ended January 31,						Nine Months Ended January  31,
	2013			2012			2013			2012
Net loss	$	(10,827	)	$	(6,575	)	$	(40,608	)	$	(17,962	)
Less accretion of redeemable convertible preferred stock		—			(10	)		—			(35	)
Net loss applicable to common stockholders	$	(10,827	)	$	(6,585	)	$	(40,608	)	$	(17,997	)
Net loss per share applicable to common stockholders, basic and diluted	$	(0.15	)	$	(0.34	)	$	(0.60	)	$	(0.93	)
Weighted average number of shares outstanding, basic and diluted		71,940			19,613			68,115			19,284
Potentially dilutive securities (1):
Outstanding stock options		4,435			5,597			6,786			5,381
Redeemable convertible preferred shares		—			27,897			—			27,897

⁽¹⁾  These securities were excluded from the computation of diluted net loss per share applicable to common stockholders because the effect would be anti-dilutive.

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Income Taxes - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Jan. 31, 2013	Jan. 31, 2012	Jan. 31, 2013	Jan. 31, 2012
Schedule Of Income Taxes [Line Items]
Company's effective tax rate	17.50%	(2.80%)	4.10%	(2.70%)
Tax benefit resulting from a reduction in the valuation allowance	$ 2.5

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Summary of Significant Accounting Policies

9 Months Ended

Jan. 31, 2013

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The Company’s significant accounting policies and recent accounting pronouncements are described in Note 2 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2012, filed on June 11, 2012. The unaudited condensed consolidated financial statements and notes included herein should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2012, filed on June 11, 2012.

Unaudited Interim Financial Information

The accompanying unaudited condensed consolidated financial statements and notes have been prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“U.S. GAAP”), as contained in the Financial Accounting Standards Board (“FASB”), Accounting Standards Codification for interim financial information and Article 10 of Regulation S-X issued by the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not include all the information and footnotes required by U.S. GAAP for annual fiscal reporting periods. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of the results of operations, financial position, changes in stockholders’ equity and cash flows. The results of operations for the three and nine months ended January 31, 2013 are not necessarily indicative of results that may be expected for the year ending April 30, 2013 or any other period.

Fair Value of Financial Instruments

The Company applies the authoritative guidance on fair value measurements for financial assets and liabilities and non-financial assets and liabilities, such as goodwill, indefinite-lived intangible assets and property plant and equipment that are measured at fair value on a non-recurring basis. The guidance defines fair value, thereby eliminating inconsistencies in guidance found in various prior accounting pronouncements, and increases disclosures surrounding fair value calculations. The guidance establishes a three-tiered fair value hierarchy that prioritizes inputs to valuation techniques used in fair value calculations. The three levels of inputs are defined as follows:

Level 1: Unadjusted quoted prices for identical assets or liabilities in active markets accessible by the Company.

Level 2: Inputs that are observable in the marketplace other than those inputs classified as Level 1.

Level 3: Inputs that are unobservable in the marketplace and significant to the valuation.

Derivative Financial Instruments

As a result of the Company’s international operations, it is exposed to various market risks that may affect its consolidated results of operations, cash flows and financial position. These market risks include, but are not limited to, fluctuations in currency exchange rates. The Company’s primary foreign currency exposures are in Euros and British Pound Sterling. The Company faces exposure to adverse movements in currency exchange rates as the financial results of certain of its operations are translated from local currency into U.S. dollars upon consolidation. Additionally, foreign exchange rate fluctuations on transactions denominated in currencies other than the functional currency result in gains and losses that are reflected in income.

The Company may enter into derivative instruments to hedge certain net exposures of non-U.S. dollar-denominated assets and liabilities, even though it does not elect to apply hedge accounting or hedge accounting does not apply. Gains and losses resulting from a change in fair value of these derivatives are reflected in income in the period in which the change occurs and are recognized on the consolidated statement of operations in other income (expense). Cash flows from these contracts are classified within net cash used in operating activities on the consolidated statements of cash flows.

The Company does not use financial instruments for trading or speculative purposes. The Company recognizes all derivative instruments on the balance sheet at fair value, and its derivative instruments are generally short-term in duration. Derivative contracts were not material as of January 31, 2013. The Company is exposed to the risk that counterparties to derivative contracts may fail to meet their contractual obligations.

There have been no other significant changes or updates to the Company’s significant accounting policies disclosed in its Annual report on Form 10-K for the fiscal year ended April 30, 2012, filed on June 11, 2012.

Recently Adopted Accounting Pronouncements

Goodwill

In September 2011, the FASB issued ASU 2011-08, “Intangibles – Goodwill and Other: Testing Goodwill for Impairment,” which simplifies the periodic testing of goodwill for impairment. This guidance will allow companies to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test required under current accounting standards. This guidance will be effective for the Company’s annual goodwill impairment test performed in the fiscal year ending April 30, 2013 and is not expected to have a material impact on the Company’s consolidated financial statements.

Comprehensive Income

In June 2011, the FASB issued a standard to require an entity to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The standard eliminates the option to present the components of other comprehensive income as part of the statement of equity. The updated accounting guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 on a retrospective basis. Early application is permitted. The Company adopted the updated guidance in the first quarter of the fiscal year ending April 30, 2013.

In February 2013, the FASB issued an update to improve the reporting of reclassifications out of accumulated other comprehensive income (“AOCI”). Companies are also required to present reclassifications by component when reporting changes in AOCI balances. The updated accounting guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2012 on a prospective basis. This guidance will be effective for the fiscal year ending April 30, 2014 and is not expected to have a material impact on the Company’s consolidated financial statements.

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Business Combinations - Additional Information (Detail) (USD $) Share data in Millions, except Per Share data, unless otherwise specified	3 Months Ended	9 Months Ended			3 Months Ended	9 Months Ended			1 Months Ended			3 Months Ended	9 Months Ended		1 Months Ended
	Jan. 31, 2013	Jan. 31, 2013	Jan. 31, 2012	Nov. 04, 2012	Jan. 31, 2012 PowerReviews, Inc.	Jan. 31, 2012 PowerReviews, Inc.	Jan. 31, 2013 PowerReviews, Inc.	Jun. 12, 2012 PowerReviews, Inc.	Jun. 30, 2012 PowerReviews, Inc. Common Stock	Jan. 31, 2013 Longboard Media, Inc	Nov. 05, 2012 Longboard Media, Inc	Jan. 31, 2013 Longboard Media, Inc Contingent Consideration Subject to Certain Requirements	Jan. 31, 2013 Longboard Media, Inc Contingent Consideration Subject to Certain Requirements	Nov. 05, 2012 Longboard Media, Inc Contingent Consideration Subject to Certain Requirements	Nov. 30, 2012 Longboard Media, Inc Common Stock
Business Acquisition [Line Items]
Cash paid in business acquisition							$ 31,059,000	$ 31,100,000			$ 26,900,000
Shares of common Stock issued in business acquisition									6.4						0.5
Number of vested and unvested options equivalent to the acquired company's option								1.7
Closing price of common stock	$ 17.20	$ 17.20		$ 12.60
Contingent consideration payables											11,000,000			2,000,000
Compensation expense												200,000	200,000
Contingent consideration acquisition fair value							9,950,000			4,270,000	4,270,000
Amortization of acquired intangible assets	1,165,000	2,543,000			1,600,000
Incremental Stock-based expense		19,072,000	5,758,000		600,000
Stock based compensation related to post service combination service arrangements			1,700,000			4,900,000
Acquisition Costs			$ 4,800,000			$ 9,800,000

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Summary of Fair Value of Financial Assets and Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Jan. 31, 2013	Apr. 30, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	$ 81,646	$ 50,834
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	9,000	29,006
Restricted cash	604	500
Short-term investments	81,646	50,834
Total assets	91,250	80,340
Contingent consideration	4,270
Total liabilities	4,270
Fair Value, Measurements, Recurring | U.S. Treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	8,997	7,499
Short-term investments	70,060	28,099
Fair Value, Measurements, Recurring | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents		21,219
Short-term investments		18,239
Fair Value, Measurements, Recurring | Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	11,586	4,496
Fair Value, Measurements, Recurring | Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	3	288
Quoted prices in active markets for identical assets (Level 1) | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	9,000	7,787
Restricted cash	604	500
Short-term investments	70,060	28,099
Total assets	79,664	36,386
Quoted prices in active markets for identical assets (Level 1) | Fair Value, Measurements, Recurring | U.S. Treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	8,997	7,499
Short-term investments	70,060	28,099
Quoted prices in active markets for identical assets (Level 1) | Fair Value, Measurements, Recurring | Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	3	288
Significant other observable inputs (Level 2) | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents		21,219
Short-term investments	11,586	22,735
Total assets	11,586	43,954
Significant other observable inputs (Level 2) | Fair Value, Measurements, Recurring | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents		21,219
Short-term investments		18,239
Significant other observable inputs (Level 2) | Fair Value, Measurements, Recurring | Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	11,586	4,496
Significant unobservable inputs (Level 3) | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	4,270
Total liabilities	$ 4,270

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Purchase Price (Detail) (USD $) In Thousands, unless otherwise specified					9 Months Ended
	Jan. 31, 2013 PowerReviews, Inc.	Jun. 12, 2012 PowerReviews, Inc.	Jan. 31, 2013 PowerReviews, Inc. Developed Technology	Jan. 31, 2013 PowerReviews, Inc. Customer Relationships	Jan. 31, 2013 Longboard Media, Inc	Nov. 05, 2012 Longboard Media, Inc	Jan. 31, 2013 Longboard Media, Inc Customer Relationships
Business Acquisition [Line Items]
Cash and cash equivalents	$ 745				$ 588
Cash					26,855
Restricted cash	104
Common stock					5,802
Accounts receivable	497				2,899
Prepaid expenses and other current assets	156				53
Property and equipment	280
Current deferred tax asset	239				437
Domain name (indefinite useful life)	800
Intangible assets subject to amortization			5,400	35,000			11,300
Total identified intangibles	41,200				11,300
Goodwill	113,152				28,681
Deferred tax asset-long term					1,042
Total assets acquired	156,373				45,000
Accounts payable	(304)				(3,006)
Accrued liabilities	(2,167)				(1,112)
Deferred revenue	(2,627)
Deferred tax liability					(3,955)
Non-current deferred tax liability	(521)
Total liabilities assumed	(5,619)				(8,073)
Net assets acquired	150,754				36,927
Business Acquisition, Cost of Acquired Entity, Cash Paid	31,059	31,100				26,900
Common stock	109,745
Fair value of contingent consideration	9,950				4,270	4,270
Total consideration	150,754
Total consideration					$ 36,927

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Purchase Price (Parenthetical) (Detail)	9 Months Ended
	Jan. 31, 2013
PowerReviews, Inc. | Developed Technology
Business Acquisition [Line Items]
Useful life	3 years
PowerReviews, Inc. | Minimum | Customer Relationships
Business Acquisition [Line Items]
Useful life	3 years
PowerReviews, Inc. | Maximum | Customer Relationships
Business Acquisition [Line Items]
Useful life	10 years
Longboard Media, Inc | Customer Relationships
Business Acquisition [Line Items]
Useful life	10 years

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Organization and Nature of Operations

9 Months Ended

Jan. 31, 2013

Organization and Nature of Operations

1. Organization and Nature of Operations

Bazaarvoice, Inc. (“Bazaarvoice” or the “Company”) is a leading provider of social commerce solutions that help its clients capture, display and analyze online word of mouth, including consumer-generated ratings and reviews, questions and answers, stories, recommendations, photographs, videos and other content about its clients’ brands, products or services. Bazaarvoice, which literally means “voice of the marketplace,” was founded on the premise that online word of mouth is critical to consumers and businesses because of its influence on purchasing decisions, both online and offline. Bazaarvoice helps clients to leverage social data derived from online word of mouth content to increase sales, acquire new customers, improve marketing effectiveness, enhance consumer engagement across channels, increase success of new product launches, improve existing products and services, effectively scale customer support, decrease product returns and enable retailers to launch and manage on-site advertising solutions and site monetization strategies.

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Unaudited Pro forma Adjusted Summary (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Jan. 31, 2013	Jan. 31, 2012	Jan. 31, 2013	Jan. 31, 2012
Business Acquisition [Line Items]
Pro forma adjusted total revenue	$ 42,771	$ 31,621	$ 120,497	$ 85,142
Pro forma adjusted net loss attributable to Bazaarvoice, Inc.	$ (8,662)	$ (10,724)	$ (36,253)	$ (46,225)
Basic and diluted	$ (0.12)	$ (0.41)	$ (0.52)	$ (1.77)

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Common Stock - Additional Information (Detail) (USD $) In Millions, except Share data, unless otherwise specified	1 Months Ended
	Jul. 31, 2012	Jul. 23, 2012
Class of Stock [Line Items]
Common stock sold	9,775,000
Selling price per share		$ 15.40
Gross proceeds raised from the sale of common stock	$ 55.8
Net proceeds from the sale of our common stock	51.9
Underwriting discounts and commissions	2.7
Other offering expenses		$ 1.2
Shares were offered by Company
Class of Stock [Line Items]
Common stock sold	3,625,000
Shares were offered by selling stockholders
Class of Stock [Line Items]
Common stock sold	6,150,000

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jan. 31, 2013	Apr. 30, 2012
Current assets:
Cash and cash equivalents	$ 23,845	$ 74,367
Restricted cash	604	500
Short-term investments	81,646	50,834
Accounts receivable, net of allowance for doubtful accounts of $1,564 and $788 as of January 31, 2013, and April 30, 2012, respectively	30,310	17,977
Prepaid expenses and other current assets	4,624	3,873
Total current assets	141,029	147,551
Property equipment and capitalized internal-use software development costs, net	13,431	8,868
Goodwill	141,833
Acquired intangible assets, net	53,465
Other non-current assets	190	448
Total assets	349,948	156,867
Current liabilities:
Accounts payable	6,189	2,523
Accrued expenses and other current liabilities	23,289	12,725
Deferred revenue	50,755	42,152
Total current liabilities	80,233	57,400
Deferred revenue less current portion	2,162	3,434
Deferred tax liability, long-term	1,393	31
Other liabilities, long-term	6,836	2,404
Total liabilities	90,624	63,269
Commitments and contingencies (Note 11)
Stockholders' equity:
Common stock - $0.0001 par value; 150,000,000 shares authorized, 72,948,155 shares issued and 72,698,155 shares outstanding as of January 31, 2013; 150,000,000 shares authorized, 58,779,937 shares issued and 58,529,937 shares outstanding as of April 30, 2012	7	6
Treasury stock, at cost - 250,000 shares at January 31, 2013 and April 30, 2012
Additional paid-in capital	365,115	158,769
Accumulated other comprehensive loss	(33)	(20)
Accumulated deficit	(105,765)	(65,157)
Total stockholders' equity	259,324	93,598
Total liabilities and stockholders' equity	$ 349,948	$ 156,867

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Condensed Consolidated Statement of Changes in Stockholders' Equity (USD $) In Thousands	Total USD ($)	Common Stock USD ($)	Treasury Stock	Additional Paid-in Capital USD ($)	Accumulated Other Comprehensive Income (Loss) USD ($)	Retained Earnings USD ($)	PowerReviews, Inc. USD ($)	PowerReviews, Inc. Common Stock USD ($)	PowerReviews, Inc. Additional Paid-in Capital USD ($)	Longboard Media, Inc USD ($)	Longboard Media, Inc Common Stock	Longboard Media, Inc Additional Paid-in Capital USD ($)
Beginning balance at Apr. 30, 2012	$ 93,598	$ 6		$ 158,769	$ (20)	$ (65,157)
Beginning balance, Shares at Apr. 30, 2012		58,780	250
Issuance of stock for acquisition, shares								6,381			460
Issuance of stock for acquisition	125,497						119,695	1	119,694	5,802		5,802
Issuance of common stock, net of issuance costs, Shares		3,625
Issuance of common stock, net of issuance costs	51,943			51,943
Excess tax benefit related to stock-based compensation	365			365
Stock-based expense	19,072			19,072
Issuance of restricted stock awards		50
Exercise of stock options and vested restricted stock units, Shares		3,652
Exercise of stock options and vested restricted stock units	9,470			9,470
Change in foreign currency translation adjustment	(30)				(30)
Change in unrealized loss on investments	17				17
Net loss	(40,608)					(40,608)
Ending balance at Jan. 31, 2013	$ 259,324	$ 7		$ 365,115	$ (33)	$ (105,765)
Ending balance, Shares at Jan. 31, 2013		72,948	250

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Acquired Intangible Assets Net - Additional Information (Detail) (Shopzilla Customer Contracts, USD $) In Millions, unless otherwise specified	1 Months Ended	3 Months Ended	9 Months Ended
	Dec. 31, 2012	Jan. 31, 2013	Jan. 31, 2013
Acquired Intangible Assets Amortization [Line Items]
Purchase of customer contracts, cash remitted	$ 4.2
Purchase of customer contracts, holdback liability	0.5
Amortization expense on acquired intangible assets		1.7	3.7
Cost of revenue
Acquired Intangible Assets Amortization [Line Items]
Amortization expense on acquired intangible assets		0.5	1.2
Customer Relationships
Acquired Intangible Assets Amortization [Line Items]
Purchase of customer contracts, purchase price	$ 4.7
Purchase of customer contracts, remaining useful life of acquired contractual customer relationships	10 years

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Business Combinations (Tables)

9 Months Ended

Jan. 31, 2013

Unaudited Pro forma Adjusted Summary

The following unaudited pro forma adjusted summary for the three and nine months ended January 31, 2013 and 2012 assumes that PowerReviews and Longboard Media had been acquired on May 1, 2011 (in thousands, except net loss per share data):

	Three Months  Ended January 31,						Nine Months Ended January  31,
	2013			2012			2013			2012
Pro forma adjusted total revenue	$	42,771		$	31,621		$	120,497		$	85,142
Pro forma adjusted net loss attributable to Bazaarvoice, Inc.	$	(8,662	)	$	(10,724	)	$	(36,253	)	$	(46,225	)
Pro forma adjusted net loss per share applicable to common stockholders attributable to
Bazaarvoice, Inc.:
Basic and diluted	$	(0.12	)	$	(0.41	)	$	(0.52	)	$	(1.77	)

PowerReviews, Inc.

Purchase Price

The Company allocated the purchase price for PowerReviews as follows (in thousands):

Cash and cash equivalents	$	745
Restricted cash		104
Accounts receivable		497
Prepaid expenses and other current assets		156
Property and equipment		280
Current deferred tax asset		239
Intangible assets:
Domain name (indefinite useful life)		800
Developed technology (3 year useful life)		5,400
Customer relationships (3 to 10 year useful life)		35,000
Total identified intangibles		41,200
Goodwill		113,152
Total assets acquired		156,373
Accounts payable		(304	)
Accrued liabilities		(2,167	)
Deferred revenue		(2,627	)
Non-current deferred tax liability		(521	)
Total liabilities assumed		(5,619	)
Net assets acquired	$	150,754

Using a price of $17.20 per share of common stock issued, which was the closing price of the Company’s common stock on the NASDAQ Global Market on the date of the acquisition, the consideration paid was as follows (in thousands):

Cash	$	31,059
Common stock		109,745
Fair value of vested stock options assumed		9,950
Total consideration	$	150,754

Longboard Media, Inc

Purchase Price

The Company allocated the purchase price for Longboard Media as follows (in thousands):

Cash and cash equivalents	$	588
Accounts receivable		2,899
Prepaid expenses and other current assets		53
Deferred tax asset—current		437
Intangible assets
Customer relationships (10 year useful life)		11,300
Total identified intangibles		11,300
Goodwill		28,681
Deferred tax asset—long term		1,042
Total assets acquired		45,000
Accounts payable		(3,006	)
Accrued liabilities		(1,112	)
Deferred tax liability		(3,955	)
Total liabilities assumed		(8,073	)
Net assets acquired	$	36,927

Using a price of $12.60 per share of common stock issued, which was the closing price of the Company’s common stock on the NASDAQ Global Market on the day prior to the date of acquisition, the consideration paid was as follows (in thousands):

Cash	$	26,855
Common stock		5,802
Fair value of contingent consideration		4,270
Total consideration	$	36,927

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Acquired Intangible Assets Net (Detail) (USD $) In Thousands, unless otherwise specified	Jan. 31, 2013
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Fair Value	$ 57,227
Accumulated Amortization	(3,762)
Net Book Value	53,465
Domain Name
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Fair Value	800
Net Book Value	800
Customer Relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Fair Value	51,027
Accumulated Amortization	(2,622)
Net Book Value	48,405
Developed Technology
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Fair Value	5,400
Accumulated Amortization	(1,140)
Net Book Value	$ 4,260

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Acquired Intangible Assets, net (Tables)

9 Months Ended

Jan. 31, 2013

Acquired Intangible Assets Net

Acquired intangible assets, net as of January 31, 2013 from business combinations (see Note 4) and the intangible asset purchase described above are as follows (in thousands):

	Gross Fair Value		Accumulated Amortization			Net Book Value
Customer relationships	$	51,027	$	(2,622	)	$	48,405
Developed technology		5,400		(1,140	)		4,260
Domain name (indefinite useful life)		800		—			800
	$	57,227	$	(3,762	)	$	53,465

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Jan. 31, 2013	Jan. 31, 2012
Operating activities
Net loss	$ (40,608)	$ (17,962)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization expense	7,473	2,247
Stock-based expense	19,072	5,758
Bad debt expense	1,643	925
Excess tax benefit related to stock-based compensation	(365)
Changes in operating assets and liabilities:
Accounts receivable	(10,581)	(8,394)
Prepaid expenses and other current assets	257	529
Other non-current assets	1,161	(361)
Accounts payable	521	2,005
Accrued expenses and other current liabilities	7,027	5,125
Deferred revenue	4,647	9,971
Other liabilities, long-term	(2,952)	1
Net cash used in operating activities	(12,705)	(156)
Investing activities
Acquisitions, net of cash acquired, and purchase of intangible asset	(60,750)
Purchases of property, equipment and capitalized internal-use software development costs	(8,004)	(3,806)
Purchases of short-term investments	(74,578)
Proceeds from sale of short-term investments	43,783
Increase in restricted cash		(250)
Net cash used in investing activities	(99,549)	(4,056)
Financing activities
Payments of initial stock offering costs		(938)
Proceeds received from follow-on stock offering, net of costs	51,943
Proceeds from exercise of stock options	9,470	2,478
Excess tax benefit related to stock-based compensation	365
Net cash provided by financing activities	61,778	1,540
Effect of exchange rate fluctuations on cash and cash equivalents	(46)	(73)
Net decrease in cash and cash equivalents	(50,522)	(2,745)
Cash and cash equivalents at beginning of period	74,367	15,050
Cash and cash equivalents at end of period	23,845	12,305
Supplemental disclosure of other cash flow information:
Cash paid for income taxes	236	105
Supplemental disclosure of non-cash investing and financing activities:
Accretion of redeemable convertible preferred stock		35
Accrued stock offering costs		1,600
Issuance of stock for acquisition	$ 125,497

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Jan. 31, 2013	Apr. 30, 2012
Allowance for doubtful accounts	$ 1,564	$ 788
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	72,948,155	58,779,937
Common stock, shares outstanding	72,698,155	58,529,937
Treasury stock, shares	250,000	250,000

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Common Stock

9 Months Ended

Jan. 31, 2013

Common Stock

10. Common Stock

On July 23, 2012, the Company completed a follow-on offering in which 9,775,000 shares of its common stock were sold, of which 3,625,000 shares were offered by the Company and 6,150,000 shares were offered by selling stockholders, at a price of $15.40 per share. The gross proceeds raised by the Company from the sale of its common stock in the offering was approximately $55.8 million, resulting in net proceeds to the Company from the sale of its common stock of approximately $51.9 million, after deducting underwriting discounts and commissions of approximately $2.7 million and other offering expenses of approximately $1.2 million.

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Document and Entity Information	9 Months Ended
	Jan. 31, 2013	Feb. 28, 2013
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jan. 31, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Trading Symbol	BV
Entity Registrant Name	Bazaarvoice Inc
Entity Central Index Key	0001330421
Current Fiscal Year End Date	--04-30
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		72,787,229

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Commitments and Contingencies

9 Months Ended

Jan. 31, 2013

Commitments and Contingencies

11. Commitments and Contingencies

The Company reviews the status of each matter and records a provision for a liability when it is considered both probable that a liability has been incurred and that 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 would not have a material effect on the Company’s condensed consolidated financial statements (if applicable) or discloses that an estimate of the possible loss or range of loss cannot be made.

On January 10, 2013, the U.S. Department of Justice filed a complaint against the Company with the U.S. District Court for the Northern District of California, San Francisco Division, alleging that the Company’s acquisition of PowerReviews violates Section 7 of the Clayton Act, 15 U.S.C. Section 18 and seeking the Company’s divestiture of assets sufficient to create a competing business that can replace the competitive significance of PowerReviews in the marketplace. The Company disputes the allegations and intends to vigorously contest the matter. Due to the early stages of the case, it is not possible to reliably predict the outcome of the case. Therefore, the Company cannot currently estimate the possible loss or range of loss that could result from the case.

At January 31, 2013, 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, will be between $1.1 million and $2.7 million. The Company has accrued a liability of $1.7 million, representing the best estimate of the amount within this range that will probably be incurred to settle these obligations. The estimated range includes an action plan for recovering the amounts due from the Company’s customers. If it is determined that the portion of the Company’s product offering subject to state sales tax is greater than that used to determine the accrual at January 31, 2013, or if there are changes in our underlying assumptions, then the actual liability incurred will likely approach the higher end of the current estimated range.

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Condensed Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Jan. 31, 2013	Jan. 31, 2012	Jan. 31, 2013	Jan. 31, 2012
Revenue	$ 42,678	$ 27,602	$ 116,966	$ 74,705
Cost of revenue	14,217	9,514	40,949	26,116
Gross profit	28,461	18,088	76,017	48,589
Operating expenses:
Sales and marketing	20,710	12,152	53,882	35,469
Research and development	8,914	6,059	24,356	13,978
General and administrative	8,783	5,934	32,463	15,848
Acquisition-related and other	2,021		4,771
Amortization of acquired intangible assets	1,165		2,543
Total operating expenses	41,593	24,145	118,015	65,295
Operating loss	(13,132)	(6,057)	(41,998)	(16,706)
Other income (expense), net
Interest income	61	4	110	17
Other income (expense)	(49)	(341)	(451)	(805)
Total other income (expense), net	12	(337)	(341)	(788)
Loss before income taxes	(13,120)	(6,394)	(42,339)	(17,494)
Income tax expense (benefit)	(2,293)	181	(1,731)	468
Net loss	(10,827)	(6,575)	(40,608)	(17,962)
Accretion of redeemable convertible preferred stock		(10)		(35)
Net loss applicable to common stockholders	$ (10,827)	$ (6,585)	$ (40,608)	$ (17,997)
Net loss per share applicable to common stockholders:
Basic and diluted	$ (0.15)	$ (0.34)	$ (0.60)	$ (0.93)
Basic and diluted weighted average number of shares outstanding	71,940	19,613	68,115	19,284

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Goodwill

9 Months Ended

Jan. 31, 2013

Goodwill

5. Goodwill

At January 31, 2013, the Company had goodwill in the amount of $141.8 million. The Company assesses goodwill for impairment annually in the fourth fiscal quarter or more frequently if other indicators of potential impairment arise. There were no indicators of impairment as of January 31, 2013.

The following table reflects the changes in goodwill for the nine months ended January 31, 2013 (in thousands):

Balance, as of April 30, 2012	$	—
Increase in goodwill related to PowerReviews acquisition		113,152
Increase in goodwill related to Longboard Media acquisition		28,681
Balance, as of January 31, 2013	$	141,833

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Business Combinations

9 Months Ended

Jan. 31, 2013

Business Combinations

4. Business Combinations

PowerReviews

On June 12, 2012, the Company acquired PowerReviews, Inc. (“PowerReviews”) for $31.1 million in cash and 6.4 million shares of the Company’s common stock. In connection with the acquisition, the Company assumed the PowerReviews option plan. After conversion, the PowerReviews options were equivalent to vested and unvested options to purchase 1.7 million shares of the Company’s common stock.

PowerReviews solutions are offered through two platforms, an enterprise platform that is similar to the Company’s current Conversations platform and an Express platform that provides certain ratings and reviews solutions as a turn-key offering. The Company accounted for the PowerReviews acquisition using the acquisition method of accounting.

The Company preliminarily allocated the purchase price to the assets acquired, including intangible assets, and liabilities assumed based on estimated fair values at the date of the acquisition. The Company estimated the value of tangible assets and liabilities based on purchase price and future intended use. The Company derived the value of intangible assets from the present value of estimated future benefits from the various intangible assets acquired.

While the Company uses its best estimates and assumptions as part of the purchase price allocation process to value assets acquired and liabilities assumed at the business combination date, its estimates and assumptions are subject to refinement. As a result, during the preliminary purchase price allocation period, which may be up to one year from the business combination date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. The Company records adjustments to assets acquired or liabilities assumed subsequent to the measurement period in its operating results in the period in which the adjustments were determined.

The Company allocated the purchase price for PowerReviews as follows (in thousands):

Cash and cash equivalents	$	745
Restricted cash		104
Accounts receivable		497
Prepaid expenses and other current assets		156
Property and equipment		280
Current deferred tax asset		239
Intangible assets:
Domain name (indefinite useful life)		800
Developed technology (3 year useful life)		5,400
Customer relationships (3 to 10 year useful life)		35,000
Total identified intangibles		41,200
Goodwill		113,152
Total assets acquired		156,373
Accounts payable		(304	)
Accrued liabilities		(2,167	)
Deferred revenue		(2,627	)
Non-current deferred tax liability		(521	)
Total liabilities assumed		(5,619	)
Net assets acquired	$	150,754

Using a price of $17.20 per share of common stock issued, which was the closing price of the Company’s common stock on the NASDAQ Global Market on the date of the acquisition, the consideration paid was as follows (in thousands):

Cash	$	31,059
Common stock		109,745
Fair value of vested stock options assumed		9,950
Total consideration	$	150,754

Goodwill represents the excess of the purchase price over the aggregate fair value of the net identifiable assets acquired and is not deductible for tax purposes. Goodwill for PowerReviews resulted primarily from the Company’s expectations that PowerReviews solutions will enhance the Company’s product offering and delivery. The Company integrated the PowerReviews business into the Company’s operations. Therefore, there are no separate revenue and earnings for PowerReviews since the integration.

Longboard Media, Inc.

On November 5, 2012, the Company acquired Longboard Media, Inc. (“Longboard Media”) for approximately $26.9 million in cash, 0.5 million shares of the Company’s common stock and future contingent consideration with an acquisition date fair value of $4.3 million. The contingent consideration is payable on Longboard Media’s achievement of certain performance goals as of December 31, 2013. The estimated fair value of contingent consideration was determined using a discounted cash flow model and the probability of various outcomes of achieving the performance goals. Changes in the fair value of this contingent consideration will be recorded in the income statement through the date of payout. A portion of the contingent consideration is also subject to requirements that certain identified key individuals remain employed with the Company through December 31, 2013. This portion of the contingent consideration was excluded from the purchase consideration and will be recorded as compensation expense over the period the services are provided. The Company currently estimates that approximately $2.0 million will be paid for this portion of the contingent consideration and as such has recorded compensation expense of $0.2 million for the three and nine months ended January 31, 2013. The maximum amount of contingent consideration that can be paid out is capped at $11.0 million.

Longboard Media is a full service media management network for retailers, shopping publishers and advertisers. Longboard Media enables retailers to launch and manage on-site advertising solutions and site monetization strategies and enables brands to target consumers across shopping publishers, mobile commerce applications and retailers. The Company accounted for the Longboard Media acquisition using the acquisition method of accounting.

The Company preliminarily allocated the purchase price to the assets acquired, including intangible assets, and liabilities assumed based on estimated fair values at the date of the acquisition. The Company estimated the value of tangible assets and liabilities based on purchase price and future intended use. The Company derived the value of intangible assets from the present value of estimated future benefits from the various intangible assets acquired.

While the Company uses its best estimates and assumptions as part of the purchase price allocation process to value assets acquired and liabilities assumed at the business combination date, its estimates and assumptions are subject to refinement. As a result, during the preliminary purchase price allocation period, which may be up to one year from the business combination date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. The Company records adjustments to assets acquired or liabilities assumed subsequent to the measurement period in its operating results in the period in which the adjustments were determined.

The Company allocated the purchase price for Longboard Media as follows (in thousands):

Cash and cash equivalents	$	588
Accounts receivable		2,899
Prepaid expenses and other current assets		53
Deferred tax asset—current		437
Intangible assets
Customer relationships (10 year useful life)		11,300
Total identified intangibles		11,300
Goodwill		28,681
Deferred tax asset—long term		1,042
Total assets acquired		45,000
Accounts payable		(3,006	)
Accrued liabilities		(1,112	)
Deferred tax liability		(3,955	)
Total liabilities assumed		(8,073	)
Net assets acquired	$	36,927

Using a price of $12.60 per share of common stock issued, which was the closing price of the Company’s common stock on the NASDAQ Global Market on the day prior to the date of acquisition, the consideration paid was as follows (in thousands):

Cash	$	26,855
Common stock		5,802
Fair value of contingent consideration		4,270
Total consideration	$	36,927

Goodwill represents the excess of the purchase price over the aggregate fair value of the net identifiable assets acquired and is not deductible for tax purposes. The goodwill for Longboard Media primarily results from the Company’s expectation to continue developing network solutions to leverage its consumer audience reach, content and data to create incremental value for its clients.

Pro Forma Adjusted Summary

The results of operations of PowerReviews and Longboard Media have been included in the Company’s unaudited condensed consolidated financial statements subsequent to the acquisition date. The following unaudited pro forma adjusted summary for the three and nine months ended January 31, 2013 and 2012 assumes that PowerReviews and Longboard Media had been acquired on May 1, 2011 (in thousands, except net loss per share data):

	Three Months  Ended January 31,						Nine Months Ended January  31,
	2013			2012			2013			2012
Pro forma adjusted total revenue	$	42,771		$	31,621		$	120,497		$	85,142
Pro forma adjusted net loss attributable to Bazaarvoice, Inc.	$	(8,662	)	$	(10,724	)	$	(36,253	)	$	(46,225	)
Pro forma adjusted net loss per share applicable to common stockholders attributable to
Bazaarvoice, Inc.:
Basic and diluted	$	(0.12	)	$	(0.41	)	$	(0.52	)	$	(1.77	)

The unaudited pro forma results for the three months ended January 31, 2012 include $1.6 million of amortization charges for acquired intangible assets and $0.6 million of stock-based expense related to the post-combination service arrangements entered into with the continuing employees. The unaudited pro forma results for the nine months ended January 31, 2012 include $4.9 million of amortization charges for acquired intangible assets, adjustments for $9.8 million of incremental stock-based expense related to the acceleration of options due to the acquisition, $1.7 million of stock-based expense related to the post-combination service arrangements entered into with the continuing employees and $4.8 million of acquisition costs.

The unaudited pro forma adjusted summary combines the historical results for Bazaarvoice for those periods with the historical results of PowerReviews and Longboard Media for the same periods. The summary is presented for informational purposes only and is not intended to be indicative of future results of operations or whether similar results would have been achieved if the acquisition had taken place at the beginning of fiscal year 2012.

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Goodwill (Tables)

9 Months Ended

Jan. 31, 2013

Changes in Goodwill

The following table reflects the changes in goodwill for the nine months ended January 31, 2013 (in thousands):

Balance, as of April 30, 2012	$	—
Increase in goodwill related to PowerReviews acquisition		113,152
Increase in goodwill related to Longboard Media acquisition		28,681
Balance, as of January 31, 2013	$	141,833

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Subsequent Event

9 Months Ended

Jan. 31, 2013

Subsequent Event

12. Subsequent Event

On March 12, 2013, a purported shareholder derivative action was filed in the Texas State District Court for Travis County, Texas against certain of the Company’s officers and directors, former officers and directors, and against the Company as nominal defendant. The complaint in this matter alleges breaches of fiduciary duties and breaches of the Company’s corporate policies in connection with the acquisition of PowerReviews and certain of the Company’s officers’ and directors’ sales of shares of the Company’s stock. The complaint requests declaratory judgment, a disgorgement of proceeds received from such sales of the Company’s stock, damages on behalf of the Company, and equitable relief. The Company disputes the allegations and intends to vigorously contest the matter. Due to the early stages of the case, it is not possible to reliably predict the outcome of the case. Therefore, the Company cannot currently estimate the possible loss or range of loss that could result from the case.

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Debt

9 Months Ended

Jan. 31, 2013

Debt

8. Debt

On July 18, 2007, the Company entered into a loan and security agreement (“Loan Agreement”) with a financial institution, which was most recently amended in November 2012. As amended, the Loan Agreement provides for a revolving line of credit with a borrowing capacity of up to the lesser of (a) $30.0 million or (b) 100% of eligible monthly service fees as defined in the Loan Agreement, inclusive of any amounts outstanding under the $2.65 million sublimit for corporate credit card and letter of credit services. The revolving line of credit expires on January 31, 2015 with all advances immediately due and payable. The revolving line of credit bears interest at the prime based rate as defined in the Loan Agreement except during any period of time during which, in accordance with the Loan Agreement, the line bears interest at the daily adjusting LIBOR rate. Borrowings under the revolving line of credit are collateralized by substantially all assets of the Company and of its U.S. subsidiaries. The Loan Agreement contains certain financial and nonfinancial covenants. As of January 31, 2013 and 2012, the Company was in compliance with the terms of these covenants.

On November 4, 2008, the Company entered into a pledge and security agreement with a financial institution for a standby letter of credit for credit card services from a separate financial institution. As amended, the agreement provides for a standby letter of credit for credit card services in an amount not to exceed $0.5 million. The Company pledged a security interest in its money market account, in which the balance must equal at least the credit extended. This letter of credit expires annually, and the pledged security interest is recorded as short-term restricted cash in the Company’s condensed consolidated financial statements.

Prior to its acquisition by the Company, PowerReviews entered into a standby letter of credit for approximately $0.1 million from a financial institution in favor of its sub-landlord. PowerReviews pledged a security interest in its money market account to secure the reimbursement obligations in connection with this letter of credit. This letter of credit is extended annually until terminated, and the pledged money market account is recorded as short-term restricted cash in the Company’s condensed consolidated financial statements.

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Acquired Intangible Assets, net

9 Months Ended

Jan. 31, 2013

Acquired Intangible Assets, net

6. Acquired Intangible Assets, net

On December 1, 2012, the Company closed an agreement to purchase customer contracts operated in Europe by Shopzilla, Inc. (“Shopzilla”) using PowerReviews technology under a license agreement between Shopzilla and PowerReviews. The Company determined that the transaction does not constitute a business combination. The entire purchase price of $4.7 million was allocated to a customer relationship intangible asset as the intent of the purchase was to gain access to Shopzilla’s contractual customer relationships. Cash remitted on the date of purchase was $4.2 million, and $0.5 million of the purchase price has been recorded as a holdback liability recorded in accrued expenses and other current liabilities. The remaining useful life of the acquired contractual customer relationships was determined to be ten years.

Acquired intangible assets, net as of January 31, 2013 from business combinations (see Note 4) and the intangible asset purchase described above are as follows (in thousands):

	Gross Fair Value		Accumulated Amortization			Net Book Value
Customer relationships	$	51,027	$	(2,622	)	$	48,405
Developed technology		5,400		(1,140	)		4,260
Domain name (indefinite useful life)		800		—			800
	$	57,227	$	(3,762	)	$	53,465

Intangible assets are amortized over their useful lives. Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. The carrying amounts of these assets are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. Recoverability of these assets is measured by comparison of the carrying amount of each asset to the future undiscounted cash flows the asset is expected to generate.

For the three and nine months ended January 31, 2013, the Company incurred amortization expense on acquired intangible assets of $1.7 and $3.7 million, respectively, of which $0.5 and $1.2 million, respectively, was included in cost of revenue. The Company did not have any acquired intangible assets at April 30, 2012, nor did it incur any amortization expense for acquired intangible assets for the three and nine months ended January 31, 2012.

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Income Taxes

9 Months Ended

Jan. 31, 2013

Income Taxes

7. Income Taxes

The Company uses the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities will be recognized in the period that includes the enactment date. A valuation allowance is established against the deferred tax assets to reduce their carrying value to an amount that is more likely than not to be realized.

The Company computes its interim provision for income taxes by applying the estimated annual effective tax rate to income from operations and adjusts the provision for discrete tax items occurring in the period. The Company’s effective tax rate for the three and nine months ended January 31, 2013 was 17.5% and 4.1%, respectively, compared to (2.8%) and (2.7%) for the three and nine months ended January 31, 2012, respectively. During the three months ended January 31, 2013, the Company recorded a tax benefit of $2.5 million resulting from a reduction in the valuation allowance associated with the Longboard Media acquisition. The negative tax rates for the three and nine months ended January 31, 2012 were primarily attributable to estimated foreign and state income tax expense compared to a consolidated pre-tax book loss.

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Net Loss Per Share Applicable to Common Stockholders

9 Months Ended

Jan. 31, 2013

Net Loss Per Share Applicable to Common Stockholders

9. Net Loss Per Share Applicable to Common Stockholders

The following table sets forth the computations of net loss per share applicable to common stockholders for the three and nine months ended January 31, 2013 and 2012, respectively (in thousands, except net loss per share data).

	Three Months  Ended January 31,						Nine Months Ended January  31,
	2013			2012			2013			2012
Net loss	$	(10,827	)	$	(6,575	)	$	(40,608	)	$	(17,962	)
Less accretion of redeemable convertible preferred stock		—			(10	)		—			(35	)
Net loss applicable to common stockholders	$	(10,827	)	$	(6,585	)	$	(40,608	)	$	(17,997	)
Net loss per share applicable to common stockholders, basic and diluted	$	(0.15	)	$	(0.34	)	$	(0.60	)	$	(0.93	)
Weighted average number of shares outstanding, basic and diluted		71,940			19,613			68,115			19,284
Potentially dilutive securities (1):
Outstanding stock options		4,435			5,597			6,786			5,381
Redeemable convertible preferred shares		—			27,897			—			27,897

⁽¹⁾  These securities were excluded from the computation of diluted net loss per share applicable to common stockholders because the effect would be anti-dilutive.

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Changes in Goodwill (Detail) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Jan. 31, 2013
Goodwill [Line Items]
Balance, as of January 31, 2013	$ 141,833
PowerReviews, Inc.
Goodwill [Line Items]
Increase in goodwill related to acquisition	113,152
Longboard Media, Inc
Goodwill [Line Items]
Increase in goodwill related to acquisition	$ 28,681

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Fair Value of Financial Assets and Liabilities (Tables)

9 Months Ended

Jan. 31, 2013

Summary of Cash and Cash Equivalents

The following table summarizes the Company’s cash and cash equivalents as of January 31, 2013 and April 30, 2012 (in thousands):

	January 31, 2013		April 30, 2012
Demand deposit accounts	$	14,845	$	45,361
Money market funds		3		288
U.S. Treasury securities		8,997		7,499
Corporate bonds		—		21,219
Total cash and cash equivalents	$	23,845	$	74,367

Summary of Short-Term Investments

The following table summarizes the Company’s short-term investments as of January 31, 2013 (in thousands):

	Cost		Gross Unrealized Losses			Fair Value
Available-for-sale securities:
Certificates of deposit	$	11,596	$	(10	)	$	11,586
U.S. Treasury securities		70,080		(20	)		70,060
Total short-term investments	$	81,676	$	(30	)	$	81,646

The following table summarizes the Company’s short-term investments as of April 30, 2012 (in thousands):

	Cost		Gross Unrealized Losses			Fair Value
Available-for-sale securities:
Certificates of deposit	$	4,510	$	(14	)	$	4,496
U.S. Treasury securities		28,126		(28	)		28,098
Corporate bonds		18,245		(5	)		18,240
Total short-term investments	$	50,881	$	(47	)	$	50,834

Summary of Fair Value of Financial Assets and Liabilities

The following table summarizes the fair value of the Company’s financial assets and liabilities that were measured on a recurring basis as of January 31, 2013 and April 30, 2012 (in thousands):

	Fair Value Measurements at January 31, 2013								Fair Value Measurements at April 30, 2012
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	3	$	—	$	—	$	3	$	288	$	—	$	—	$	288
U.S. Treasury securities		8,997		—		—		8,997		7,499		—		—		7,499
Corporate bonds		—		—		—		—		—		21,219		—		21,219
Total cash equivalents		9,000		—		—		9,000		7,787		21,219		—		29,006
Restricted cash		604		—		—		604		500		—		—		500
Short-term investments:
Certificates of deposit		—		11,586		—		11,586		—		4,496		—		4,496
Corporate bonds		—		—		—		—		—		18,239		—		18,239
U.S. Treasury securities		70,060		—		—		70,060		28,099		—		—		28,099
Total short-term investments		70,060		11,586		—		81,646		28,099		22,735		—		50,834
Total assets	$	79,664	$	11,586	$	—	$	91,250	$	36,386	$	43,954	$	—	$	80,340
Liabilities:
Contingent consideration (see Note 4)	$	—	$	—	$	4,270	$	4,270	$	—	$	—	$	—	$	—
Total liabilities	$	—	$	—	$	4,270	$	4,270	$	—	$	—	$	—	$	—

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Summary of Cash and Cash Equivalents (Detail) (USD $) In Thousands, unless otherwise specified	Jan. 31, 2013	Apr. 30, 2012
Cash and Cash Equivalents [Line Items]
Total cash and cash equivalents	$ 23,845	$ 74,367
U.S. Treasury securities
Cash and Cash Equivalents [Line Items]
Total cash and cash equivalents	8,997	7,499
Corporate bonds
Cash and Cash Equivalents [Line Items]
Total cash and cash equivalents		21,219
Demand deposit accounts
Cash and Cash Equivalents [Line Items]
Total cash and cash equivalents	14,845	45,361
Money market funds
Cash and Cash Equivalents [Line Items]
Total cash and cash equivalents	$ 3	$ 288

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Commitments and Contingencies - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Jan. 31, 2013
Commitment And Contingencies [Line Items]
Net of liability recovered, minimum	$ 1.1
Net of liability recovered, maximum	2.7
Accrued liability	$ 1.7

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Condensed Consolidated Statements of Comprehensive Loss (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Jan. 31, 2013	Jan. 31, 2012	Jan. 31, 2013	Jan. 31, 2012
Net loss	$ (10,827)	$ (6,575)	$ (40,608)	$ (17,962)
Other comprehensive gain (loss), net of tax:
Foreign currency translation adjustment	(21)	(44)	(30)	(80)
Unrealized gain (loss) on investments	(6)		17
Total other comprehensive loss, net of tax	(27)	(44)	(13)	(80)
Comprehensive loss	$ (10,854)	$ (6,619)	$ (40,621)	$ (18,042)

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Fair Value of Financial Assets and Liabilities

9 Months Ended

Jan. 31, 2013

Fair Value of Financial Assets and Liabilities

3. Fair Value of Financial Assets and Liabilities

The following table summarizes the Company’s cash and cash equivalents as of January 31, 2013 and April 30, 2012 (in thousands):

	January 31, 2013		April 30, 2012
Demand deposit accounts	$	14,845	$	45,361
Money market funds		3		288
U.S. Treasury securities		8,997		7,499
Corporate bonds		—		21,219
Total cash and cash equivalents	$	23,845	$	74,367

The following table summarizes the Company’s short-term investments as of January 31, 2013 (in thousands):

	Cost		Gross Unrealized Losses			Fair Value
Available-for-sale securities:
Certificates of deposit	$	11,596	$	(10	)	$	11,586
U.S. Treasury securities		70,080		(20	)		70,060
Total short-term investments	$	81,676	$	(30	)	$	81,646

The following table summarizes the Company’s short-term investments as of April 30, 2012 (in thousands):

	Cost		Gross Unrealized Losses			Fair Value
Available-for-sale securities:
Certificates of deposit	$	4,510	$	(14	)	$	4,496
U.S. Treasury securities		28,126		(28	)		28,098
Corporate bonds		18,245		(5	)		18,240
Total short-term investments	$	50,881	$	(47	)	$	50,834

All short-term investments had original maturity dates of less than 12 months at January 31, 2013 and April 30, 2012.

The following table summarizes the fair value of the Company’s financial assets and liabilities that were measured on a recurring basis as of January 31, 2013 and April 30, 2012 (in thousands):

	Fair Value Measurements at January 31, 2013								Fair Value Measurements at April 30, 2012
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	3	$	—	$	—	$	3	$	288	$	—	$	—	$	288
U.S. Treasury securities		8,997		—		—		8,997		7,499		—		—		7,499
Corporate bonds		—		—		—		—		—		21,219		—		21,219
Total cash equivalents		9,000		—		—		9,000		7,787		21,219		—		29,006
Restricted cash		604		—		—		604		500		—		—		500
Short-term investments:
Certificates of deposit		—		11,586		—		11,586		—		4,496		—		4,496
Corporate bonds		—		—		—		—		—		18,239		—		18,239
U.S. Treasury securities		70,060		—		—		70,060		28,099		—		—		28,099
Total short-term investments		70,060		11,586		—		81,646		28,099		22,735		—		50,834
Total assets	$	79,664	$	11,586	$	—	$	91,250	$	36,386	$	43,954	$	—	$	80,340
Liabilities:
Contingent consideration (see Note 4)	$	—	$	—	$	4,270	$	4,270	$	—	$	—	$	—	$	—
Total liabilities	$	—	$	—	$	4,270	$	4,270	$	—	$	—	$	—	$	—

The Company measures certain assets, including property and equipment, goodwill and intangible assets, at fair value on a non-recurring basis. These assets are recognized at fair value when they are deemed to be other-than-temporarily impaired.

The Company previously classified all of its cash equivalents, restricted cash and short-term investments using Level 1 inputs. The Company has determined that the pricing methods for certain of these investments use significant other observable inputs. Accordingly, such investments held in prior periods have been presented as Level 2. The reclassification had no impact on the fair value of investments in any of the periods presented.

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Summary of Short-Term Investments (Detail) (USD $) In Thousands, unless otherwise specified	Jan. 31, 2013	Apr. 30, 2012
Schedule of Available-for-sale Securities [Line Items]
Cost	$ 81,676	$ 50,881
Gross Unrealized Gains Losses	(30)	(47)
Fair Value	81,646	50,834
Certificates of deposit
Schedule of Available-for-sale Securities [Line Items]
Cost	11,596	4,510
Gross Unrealized Gains Losses	(10)	(14)
Fair Value	11,586	4,496
U.S. Treasury securities
Schedule of Available-for-sale Securities [Line Items]
Cost	70,080	28,126
Gross Unrealized Gains Losses	(20)	(28)
Fair Value	70,060	28,098
Corporate bonds
Schedule of Available-for-sale Securities [Line Items]
Cost		18,245
Gross Unrealized Gains Losses		(5)
Fair Value		$ 18,240

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Debt - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	1 Months Ended				1 Months Ended
	Nov. 30, 2008	Nov. 30, 2008 Standby Letters of Credit	Jan. 31, 2013 Revolving Credit Facility Amendment Five	Jan. 31, 2013 Combined Letter Of Credit And Credit Card Services Subfacility	Jul. 31, 2007 Revolving Line of Credit
Debt Instrument [Line Items]
Revolving line of credit with a borrowing capacity			$ 30.00	$ 2.65
Line of credit facility current borrowing capacity percentage			100.00%
Loan and security agreement, issue date					Jul. 18, 2007
Loan and security agreement, expiration date					Jan. 31, 2015
Standby letter of credit in favor of its landlord	$ 0.5	$ 0.1

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Jan. 31, 2013

Basis of Presentation

Basis of Presentation

The Company’s significant accounting policies and recent accounting pronouncements are described in Note 2 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2012, filed on June 11, 2012. The unaudited condensed consolidated financial statements and notes included herein should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2012, filed on June 11, 2012.

Unaudited Interim Financial Information

Unaudited Interim Financial Information

The accompanying unaudited condensed consolidated financial statements and notes have been prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“U.S. GAAP”), as contained in the Financial Accounting Standards Board (“FASB”), Accounting Standards Codification for interim financial information and Article 10 of Regulation S-X issued by the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not include all the information and footnotes required by U.S. GAAP for annual fiscal reporting periods. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of the results of operations, financial position, changes in stockholders’ equity and cash flows. The results of operations for the three and nine months ended January 31, 2013 are not necessarily indicative of results that may be expected for the year ending April 30, 2013 or any other period.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company applies the authoritative guidance on fair value measurements for financial assets and liabilities and non-financial assets and liabilities, such as goodwill, indefinite-lived intangible assets and property plant and equipment that are measured at fair value on a non-recurring basis. The guidance defines fair value, thereby eliminating inconsistencies in guidance found in various prior accounting pronouncements, and increases disclosures surrounding fair value calculations. The guidance establishes a three-tiered fair value hierarchy that prioritizes inputs to valuation techniques used in fair value calculations. The three levels of inputs are defined as follows:

Level 1: Unadjusted quoted prices for identical assets or liabilities in active markets accessible by the Company.

Level 2: Inputs that are observable in the marketplace other than those inputs classified as Level 1.

Level 3: Inputs that are unobservable in the marketplace and significant to the valuation.

Derivative Financial Instruments

Derivative Financial Instruments

As a result of the Company’s international operations, it is exposed to various market risks that may affect its consolidated results of operations, cash flows and financial position. These market risks include, but are not limited to, fluctuations in currency exchange rates. The Company’s primary foreign currency exposures are in Euros and British Pound Sterling. The Company faces exposure to adverse movements in currency exchange rates as the financial results of certain of its operations are translated from local currency into U.S. dollars upon consolidation. Additionally, foreign exchange rate fluctuations on transactions denominated in currencies other than the functional currency result in gains and losses that are reflected in income.

The Company may enter into derivative instruments to hedge certain net exposures of non-U.S. dollar-denominated assets and liabilities, even though it does not elect to apply hedge accounting or hedge accounting does not apply. Gains and losses resulting from a change in fair value of these derivatives are reflected in income in the period in which the change occurs and are recognized on the consolidated statement of operations in other income (expense). Cash flows from these contracts are classified within net cash used in operating activities on the consolidated statements of cash flows.

The Company does not use financial instruments for trading or speculative purposes. The Company recognizes all derivative instruments on the balance sheet at fair value, and its derivative instruments are generally short-term in duration. Derivative contracts were not material as of January 31, 2013. The Company is exposed to the risk that counterparties to derivative contracts may fail to meet their contractual obligations.

There have been no other significant changes or updates to the Company’s significant accounting policies disclosed in its Annual report on Form 10-K for the fiscal year ended April 30, 2012, filed on June 11, 2012.

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Goodwill

In September 2011, the FASB issued ASU 2011-08, “Intangibles – Goodwill and Other: Testing Goodwill for Impairment,” which simplifies the periodic testing of goodwill for impairment. This guidance will allow companies to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test required under current accounting standards. This guidance will be effective for the Company’s annual goodwill impairment test performed in the fiscal year ending April 30, 2013 and is not expected to have a material impact on the Company’s consolidated financial statements.

Comprehensive Income

In June 2011, the FASB issued a standard to require an entity to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The standard eliminates the option to present the components of other comprehensive income as part of the statement of equity. The updated accounting guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 on a retrospective basis. Early application is permitted. The Company adopted the updated guidance in the first quarter of the fiscal year ending April 30, 2013.

In February 2013, the FASB issued an update to improve the reporting of reclassifications out of accumulated other comprehensive income (“AOCI”). Companies are also required to present reclassifications by component when reporting changes in AOCI balances. The updated accounting guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2012 on a prospective basis. This guidance will be effective for the fiscal year ending April 30, 2014 and is not expected to have a material impact on the Company’s consolidated financial statements.