The provision of services has become an increasingly important component of the economy of industrialized countries and the revenue stream for many traditional product companies. This is especially true for companies that offer information technology (IT) products. This paper examines factors that are associated with the extent to which IT product companies are able to develop service revenue, which we refer to as service expansion of IT product companies. We identify the characteristics of the product portfolio-specifically, the composition and scope of firm offerings among hardware, application software, and infrastructure software-as key to successful service expansion. We also propose that this relationship is moderated by prior performance of the product business and industry characteristics such as concentration and maturity. Data from IT product vendors spanning five years are used to test the proposed relationships. Overall, this research provides a theoretical foundation for understanding service expansion and diversification in the IT industry as well as practical guidance for IT product companies considering expansion to services.
The growth of the Internet has spawned an increasing number of online information sources (OISs). The effect of OISs on consumer information search processes has been particularly striking in sectors such as auto retailing, where the typical consumer has conventionally been confronted with an unpleasant and inefficient purchase process. However, the relationships between the information found in the online "marketspace," consumer search in the offline "marketplace," and other aspects of the multichannel shopping process are not well understood. This study examines the differential impact of price and product information found in the marketspace, relating consumers' information needs and information retrieval from OISs to three shoppingrelated outcomes—purchase based on online infomediary referral (i.e., referred purchase), intensity of search in the marketplace, and online search satisfaction. We draw on a large data set of more than 16,000 new vehicle purchasers who reported using the Web for search related to their new vehicle purchase. We find that OISs offer different levels of price and product information and consumers are differentiated in their ability to retrieve this information. Further, the retrieval of price versus product information online has important implications for whether consumers consummate their online search through referred purchase or extend their search into the physical marketplace. Our results suggest different business models for infomediaries providing price and product information and underscore the need for designing information provisioning systems of OISs to facilitate transition between the marketspace and the marketplace.