Blog, Blogger, and the Firm: Can Negative Employee Posts Lead to Positive Outcomes?

Consumer-generated media, particularly blogs, can help companies increase the visibility of their products without spending millions of dollars in advertising. Although a number of companies realize the potential of blogs and encourage their employees to blog, a good chunk of them are skeptical about losing control over this new media. Companies fear that employees may write negative things about them and that this may bring significant reputation loss. Overall, companies show mixed response toward negative posts on employee blogs---some companies show complete aversion; others allow some negative posts. Such mixed reactions toward negative posts motivated us to probe for any positive aspects of negative posts. In particular, we investigate the relationship between negative posts and readership of an employee blog.In contrast to the popular perception, our results reveal a potential positive aspect of negative posts. Our analysis suggests that negative posts act as catalyst and can exponentially increase the readership of employee blogs, suggesting that companies should permit employees to make negative posts. Because employees typically write few negative posts and largely write positive posts, the increase in readership of employee blogs generally should be enough to offset the negative effect of few negative posts. Therefore, not restraining negative posts to increase readership should be a good strategy. This raises a logical question: what should a firm's policy be regarding employee blogging? For exposition, we suggest an analytical framework using our empirical model.