O nline word-of-mouth (WOM) such as consumer opinions, user experiences, and product reviews has become a major information source in consumer purchase decisions. Prior research on online WOM effect has focused mostly on low-involvement products such as books or CDs. For these products, retailer-hosted (internal) WOM is shown to influence sales overwhelmingly. Numerous surveys, however, suggest consumers often conduct pre-purchase searches for high-involvement products (e.g., digital cameras) and visit external WOM websites during the search process. In this study, we analyze the relative impact of external and internal WOMs on retailer sales for high-involvement products using a panel of sales and WOM data for 148 digital cameras from Amazon.com and three external WOM websites (Cnet, DpReview, and Epinions) over a four-month period. The results suggest that a retailer's internal WOM has a limited influence on its sales of high-involvement products, while external WOM sources have a significant impact on the retailer's sales. The findings imply that external WOM sources play an important role in the information search process.

Many firms are moving to make virtual interfaces their primary, or even sole, points of customer contact. In this environment, some traditional service quality dimensions that determine customer satisfaction, such as the physical appearance of facilities, employees, and equipment, and employees' responsiveness and empathy are unobservable. In contrast, trust may play a central role here in enhancing customer satisfaction. We model trust as an endogenously formed entity that ultimately impacts customer satisfaction, and we elucidate the linkages between trust and other factors related to the performance of the online service provider and to the service environment. The model is validated using two samples-one comprising 225 online investors of a large online broker, and the other comprising 203 members of the American Association of Individual Investors (AAII). The findings suggest that perceived trustworthiness of an online broker is a significant antecedent to investors' satisfaction, and that perceived environmental security and perceived operational competence impact the formation of trust. The results have important managerial implications.

This paper examines the antecedents and consequences of Internet use in the procurement process. Drawing upon the resource-based view (RBV) of the firm and the technology, organization, and environment framework, we develop an integrative model that examines the antecedents and consequences of Internet use in two stages—the search stage and the order initiation and completion (OIC) stage—of the procurement process. The model enables us to deconstruct both the usage and the performance aspects of information technology (IT) in business processes, and to provide insights into the enablers of use and business value. The model is estimated with survey data from 412 firms. Our results suggest that while some resources, such as procurement-process digitization, influence Internet use in both the procurement stages, other resources, such as the diversity of organizational procurement knowledge, impact Internet use in only one stage. We also find that Internet use in the OIC stage has a more significant impact on procurement-process performance than use in search. This study extends the digital capabilities and firm performance literature in the context of electronic procurement. This study also contributes to the small but emerging stream of literature that investigates antecedents, the extent, and implications of IT use holistically.

No abstract

Virtual communities are a significant source of information for consumers and businesses. This research examines how users value virtual communities and how virtual communities differ in their value propositions. In particular, this research examines the nature of trade-offs between information quantity and quality, and explores the sources of positive and negative externalities in virtual communities. The analyses are based on more than 500,000 postings collected from three large virtual investing-related communities (VICs) for 14 different stocks over a period of four years. The findings suggest that the VICs engage in differentiated competition as they face trade-offs between information quantity and quality. This differentiation among VICs, in turn, attracts users with different characteristics. We find both positive and negative externalities at work in virtual communities. We propose and validate that the key factor that determines the direction of network externalities is posting quality. The contributions of the study include the extension of our understanding of the virtual community evaluation by users, the exposition of competition between virtual communities, the role of network externalities in virtual communities, and the development of an algorithmic methodology to evaluate the quality (noise or signal) of textual data. The insights from the study provide useful guidance for design and management of VICs.