Abstract
Many companies nowadays are using social media such as Facebook for advertising and marketing communication purposes. To understand how using social media affects a company's business performance from an electronic word-of-mouth (eWOM) perspective, this study examines how user comments on company Facebook posts, a form of eWOM, influence company revenue. Through a big data approach, the S&P 500 companies' revenue information in a five-year time span (from 2010 to 2015) is collected, and this information is matched to over 24 million user comments on these companies' Facebook posts. The estimation results indicate that eWOM volume, defined as the total number of Facebook comments a company received, has a significant and positive effect on revenue. In addition, eWOM valence, defined as the average tone of Facebook comments on a company, has also a significant and positive effect on revenue. Implications and directions for future research are discussed.