Does IT Matter where the Word-of-Mouth occurs?: an Empirical Study on the Sales Impact of the Distribution of Online User Reviews

Consumers consistently resort to online Word-of-Mouth (WOM) in online shopping, thanks to the reach of the Internet and various web tools. Nevertheless, they are confronting relatively different levels of search costs for WOM information available on the Internet, depending on the distribution of WOM across websites. This study investigates the sales impacts of dispersion of WOM volume and variation of WOM valence by using sales and WOM data of software programs from Amazon and download.com. Our results suggest that less evenly distributed WOM leads to more sales, conditional on the total number of WOM conversations across websites. And it is even more beneficial for a product’s sales if having this less dispersed WOM distribution skewed towards retailing websites. In addition, more consistent consumer evaluations across websites encourage online purchasing decisions. By comparing the volume dispersion and variance variation, we find that receiving one hundred reviews of 5-star average rating on Amazon leads to sales almost six time greater than receiving fifty reviews of 5-star average rating on Amazon and another fifty reviews of 5-star average rating on download.com.