What level of computer skills should a university instructor expect students in a business class to have?
Certainly it is reasonable to expect your students to be comfortable with a word processor and with basic internet research.

However, once in a while you will have a student who doesn't meet one of these, or some other basic skill expectation.

When this happens, you want the student to get up to speed ASAP.  You offered a helpful, practical suggestion for this -- gold star!

If your first suggestion doesn't work, then you may want to go to someone in your teaching infrastructure, such as a dean of undergraduate studies in your department, and let them know about the problem.  That person may take it from there, or give you another suggestion, or advise you that you've done all you can to get the student to remedy the deficiency, and remind you that sometimes the best motivation for change is failure.

Separate from the above, there is something you can do to help the student be more successful, in terms of your own teaching.  I'll give you an analogy.  Suppose a middle school social studies teacher assigns a project, with the instructions that to accompany the text, five hand-drawn illustrations are required.  (This example is taken from recent real life -- incredible but true!) Suppose a student in the class has some sort of difficulty (physical or otherwise) with hand-drawn illustrations.  Would it be fair to reduce this student's grade if the project is missing the five hand-drawn illustrations?  Of course not.  This student needs an educational accommodation, so that he can demonstrate his knowledge, without getting hung up on the form of demonstration.

Your internet-challenged student needed an educational accommodation too.  We don't want the student to get evaluated on her internet research skill if that in itself is not the primary (or even secondary) academic goal of your course.  (Please correct me if I'm wrong -- I'm assuming that internet research skills are a means to an end, not the end itself.)

You can do some brainstorming on your own when you see that a student needs an educational accommodation, and you can ask colleagues, friends and the disability office.  (Not because this student had a disability, but because the folks in the disability office are used to thinking outside the box.)  Once you've got a few ideas as a starting point, it's time to run them past the student to see if she has a preference, or any additional ideas.

I'll do a little quick brainstorming myself, just to get the ball rolling:


Ask for the student's email address, and send her three specific internet links you would like her to read in preparation for each assignment.
Once a week, print out three specific articles you would like her to read, understand and synthesize for that week's topic.
Mix it up.  Sometimes make a small group weekly assignment that requires collaboration.  Make sure everyone has gotten into a small group, and ask the students to let you or the TA know if their group isn't working out, so regrouping can take place.