Virtual Internet Communities and Commercial Success: Individual and Community-Level Theory Grounded in the Atypical Case of Timezone.Com

Abstract

One potentially powerful way of organizing in the new Internet world is through the medium of the virtual Internet community. An effectively managed virtual community provides economic gains to the community organizer and to its members. We attempt to build theory grounded in the study of TimeZone.com, a virtual Internet community devoted to wristwatch hobbyists and enthusiasts. We argue that a member's off-site communication, experience, perceived value of site management and content, and collectively held knowledge are positively associated with a member's e-based economic transactions within this virtual community. Building on our theorizing attempts at the individual level, we develop propositions at the organizational level that relate characteristics of virtual Internet communities (membership size, scalability, and level of site management) to commercial success.

Keywords: Virtual internet communities, information economics, increasing returns

JEL Classification: D7, D71, D82, D83, M1, M13, O32, O33