This paper examines the impact of consumer reviews on book sales on Amazon.com and BarnesandNoble.com. The authors find that: 1. **Positive Reviews Dominance**: Reviews are predominantly positive at both sites, but Amazon has more and longer reviews. 2. **Sales Impact**: An increase in the number of reviews or higher-starred reviews at one site leads to higher relative sales at that site. 3. **Impact of Star Ratings**: The impact of 1-star reviews is greater than that of 5-star reviews. The study uses publicly available data from these two leading online booksellers to construct measures of sales for individual books. By comparing sales and changes in sales of the same books across the two sites, the authors control for common shocks to word of mouth and sales, focusing on idiosyncratic shocks. The results suggest that new forms of customer communication on the Internet have a significant impact on customer behavior, particularly in the context of book sales. The study also addresses potential endogeneity concerns by using time-series data and a "differences in differences" specification to further validate the findings.This paper examines the impact of consumer reviews on book sales on Amazon.com and BarnesandNoble.com. The authors find that: 1. **Positive Reviews Dominance**: Reviews are predominantly positive at both sites, but Amazon has more and longer reviews. 2. **Sales Impact**: An increase in the number of reviews or higher-starred reviews at one site leads to higher relative sales at that site. 3. **Impact of Star Ratings**: The impact of 1-star reviews is greater than that of 5-star reviews. The study uses publicly available data from these two leading online booksellers to construct measures of sales for individual books. By comparing sales and changes in sales of the same books across the two sites, the authors control for common shocks to word of mouth and sales, focusing on idiosyncratic shocks. The results suggest that new forms of customer communication on the Internet have a significant impact on customer behavior, particularly in the context of book sales. The study also addresses potential endogeneity concerns by using time-series data and a "differences in differences" specification to further validate the findings.