The company let retailers include Amazon-like product review features into their websites, for free. PowerReviews then aggregates reviews from their client retailers on their own customer-facing site called Buzzillions.

The company had at least 42 employees before the layoffs. We’ve contacted them for confirmation and have added them to the Layoff Tracker.

Update: email from Andrew Chen, CEO:

Hi Mike,

Thanks for contacting us…although I wish that we had time to respond before the post. However, since our clients/partners will be asking the same question, this is a great opportunity to diffuse any inaccurate rumors.

The truth is that we just enacted a series of actions to reduce our BURN RATE by around 30%, not headcount. This was achieved primarily through reductions in contractors and administrative expenses. It is true that Jay Shaffer is no longer at the company full-time, as we have consolidated the marketing activities of Buzzillions.com and our Retail Solution. In fact, no development, IT, product, or client support staff were affected, and we have hired several engineers in the last couple of months.

Thanks…and please feel free to contact me directly if you ever have questions!

-Andy

P.s. If you’d like to know why we are so optimistic, we just relaunched Buzzillions.com with 3.5M+ reviews (up from 1M in Jan) and are getting amazingly positive feedback from users

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Since its launch in April 2007, the number of reviews and products offered on Buzzilions.com has tripled. Today, the site offers more than 400,000 reviews on 125,000 products from over 1,000 ecommerce sites. PowerReviews says that the traffic driven through Buzillions also converts at nearly twice the rate of other shopping portals. In April we compared PowerReviews to Bazaarvoice and other competitors – PowerRevies main advantage is easy integration, and a free version of the product.

User generated reviews help sales at ecommerce sites, but few startups have the technical and product resources to build this internally. PowerReviews, Bazaarvoice and others have stepped in to fill this need. Aggregate Knowledge and Loomia address different needs in the ecommerce space – helping these companies merchandise and recommend products to users based on behavior.

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Today, product reviews are largely concentrated at big hubs like Amazon, CNET Reviews and Epinons (owned by eBay). But lots of startups are trying to innovate and get a piece of this market, too. We’ve written about Wize, which scrapes and analyzes reviews from sites around the web (mostly Amazon and epinions), turning mostly unstructured content into a 1-100 score. We’ve also looked at many others, including Retrevo, Viewscore, Shopwiki, Metacritic and Kulist in a comparison post. All have good features, but it’s hard to stand out from the pack and get enough traction to lead the space.

PowerReviews is taking a different approach. There are many retailers that just don’t have the resources to build Amazon-like product review features into their websites. PowerReviews gives these merchants the ability to add reviews to their sites, and they don’t charge anything for it. Another startup we’ve covered, Bazaarvoice, also provides retailers with review software, although Bazaarvoice pricing starts at about $2,000 per month for smaller sites. Since PowerReviews is free, they have a big edge.

To date, 120 merchants are using the PowerReviews software. 140,000 or so reviews have been created for 45,000 unique products.

PowerReviews is willing to give away their software to merchants, but in return PowerReviews have the right to aggregate that review data and present it on their own consumer facing review site, Buzzillions.

Here’s the brilliance of the PowerReviews model. They then turn around and sell traffic from Buzzillions right back to their merchant network, on a CPC or CPA basis.

I don’t believe I’ve come across a startup before now that manages to use data, created at a partner site, to generate traffic that they then sell right back to the partner.

PowerReviews isn’t stopping there. They are offering content sites a white label version of Buzzillions in exchange for a revenue share. Their hope is that these white label sites will generate enough traffic to supply PowerReviews with a business model.

There is more to PowerReviews than an elegant business model. Their reviews are highly structured and based on 8,000 unique product templates. When users write reviews they are asked to supply answers based largely on tags, and PowerReviews suggests tags that previous users have chosen. When a new users is looking for product research, they are asked a to click on tags that describe what they are looking for. PowerReviews is then able to recommend a few products out of a category that might suit them best. It works surprisingly well – to try it, go to the digital camera page on Buzzillions and answer some of the questions in the green box center top.

Of all the new product review startups mentioned in the second paragraph above, Buzzillions seems to have found the most unique business model. Whether it will be successful or not is yet to be seen, but we’ll be checking in with them periodically for updates.

The company raised $6.2 million from Menlo Ventures and Draper Richards in December 2005.

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