Ariba and FreeMarkets Merger Approved by Stockholders of Both Companies; Union of Market Leaders to Create Comprehensive Spend Management Company.

SUNNYVALE, Calif. & PITTSBURGH -- Ariba(R), Inc. (Nasdaq:ARBA), the leading Spend Management (SM) solutions provider, and FreeMarkets, Inc. (Nasdaq: FMKT), the leading provider of global supply management solutions, today announced that their respective stockholders this morning approved the merger of FreeMarkets and Ariba. The union is expected to create a comprehensive Spend Management company by bringing together the leading Spend Management technology with the most complete sourcing and services expertise.

The merger is expected to close on Thursday, July 1, subject to satisfaction of customary closing conditions. At that time, Ariba also intends to effect a six for one reverse stock split, which was also approved by Ariba's stockholders and by its board of directors.

"In every important market a leading company emerges that becomes synonymous with the category," said Bob Calderoni, CEO, Ariba. "We believe the completion of this merger will put Ariba squarely in the leader's role as the only company focused exclusively on spend management. With the relentless pressures of the demanding global economy, more and more companies are seeking spend management solutions to accelerate their bottom line results. We believe Ariba will now be in a strong competitive position to serve this market need."

The integrated company will retain the Ariba name and will be led by a combined leadership team. The new Ariba will have more than 1,600 employees, a global presence in 21 countries, and a marquee customer list of more than 500 leading companies, including more than half of the companies listed on the FORTUNE 100. Ariba chief executive Bob Calderoni will retain his positions as CEO and Chairman of the Board, while FreeMarkets President and CEO Dave McCormick will be Ariba's president. McCormick will also join the company's board of directors, along with former FreeMarkets board member Karl E. Newkirk. Ariba headquarters will remain in Sunnyvale, California, and the company will maintain a significant presence in Pittsburgh, with more than 500 employees.

"In merging these two leading companies together, we expect to bring a highly-complementary, comprehensive set of services and technology to the market that has never before been seen," said McCormick. "We've spent the past five months developing a solid plan to integrate our offerings to provide our customers with what we believe will be the fastest, most significant and sustainable cost-savings solutions available. We will now move forward with an even stronger focus and flexibility to deliver the customized sourcing and procurement expertise that leading companies across the globe are seeking."

Customers, Analyst Support Combined Company

Customers of both companies have been positive about the merger, and key industry analysts have supported the strategic direction of the combined company.

"We have worked with both Ariba and FreeMarkets very successfully in recent years to accelerate bottom line results at PPG," said Kathleen McGuire, vice president of purchasing and distribution. "We are looking forward to working with the combined company to touch more spend, and drive more savings across more categories than ever before."

"Nokia is dedicated to enhancing people's lives and productivity by providing easy-to-use and secure products, and by continually driving innovation and efficiencies across the organization," said Alf Noto, vice president of operating resource sourcing, Nokia. "Having successfully worked with both Ariba and FreeMarkets to streamline our sourcing and procurement initiatives, we look forward to working with the new Ariba in our ongoing effort to develop new areas for savings and improvement."

"Aventis is dedicated to treating and preventing disease by discovering and developing innovative prescription drugs and human vaccines," said Giles Breault, CPO, Aventis. "By generating bottom-line savings across the organization, we are able to focus even more resources on our core business of research, development, and the improvement of human lives. Aventis has worked with Ariba to generate savings, company wide. We look forward to extending our savings by leveraging the expanded capabilities offered by the new Ariba."

"We congratulate Ariba on their upcoming merger with FreeMarkets," said Rita Marino, Procurement Strategy and Process Director, Enel SpA. "Enel aims to be one of the most efficient, market-driven, quality-focused European providers of power and gas, creating value for our customers, shareholders and people. As part of that effort, Enel has worked successfully with Ariba to help accelerate bottom-line savings and expand our spend management initiatives into more areas and commodities than ever before."

"As enterprises advance their spend management strategies require a shifting mix of applications, decision support tools, and services," said Tim Minahan, VP, Supply Chain Research and Strategy at Aberdeen Group. "The Ariba-FreeMarkets union responds to this trend with combination of a broad source-to-pay footprint and on-demand access to category expertise, sourcing, and supplier management services."

Focus on Spend Management

The new Ariba will be focused exclusively on Spend Management, offering comprehensive, tailored services to help companies drive benefits from their internal Spend Management initiatives. Ariba's expanded solutions after the merger aim to provide customers with:

--Accelerated time to savings. Quick initial results are followed by a steady stream of accelerated bottom line benefits - just what is needed to quickly expand global Spend Management and gain traction in under-managed spend areas.

--Expanded global reach, with access to more than 400 commodity and sourcing experts across the globe with experience across hundreds of spend categories.

--Sustained benefits with embedded technologies and strategies that can be leveraged on an on-going basis

--Coverage across more departments, locations, languages, commodities, suppliers, and spend categories.

About Ariba, Inc.

Ariba, Inc. is the leading Enterprise Spend Management (ESM) solutions provider. Ariba helps companies develop and leverage spend management as a core competency to drive significant bottom line results. Ariba Spend Management software and services allow companies to align their organizations with a spend-centric focus and deploy closed-loop processes for increased efficiencies and sustainable savings. Ariba can be contacted in the U.S. at 1.650.390.1000 or at www.ariba.com.

About FreeMarkets, Inc.

FreeMarkets is the leader in providing companies with software, services, and information for Global Supply Management (GSM). FreeMarkets' GSM solutions help companies to lower costs, reduce risks, and increase profitability by improving their supply management processes and expanding the reach and capabilities of their supply management organizations. FreeMarkets can be found on the Web at www.freemarkets.com.

Ariba and the Ariba logo are registered trademarks of Ariba, Inc. Ariba Spend Management, Ariba Analysis, Ariba Buyer, Ariba Category Management, Ariba Contracts, Ariba Travel & Expense, Ariba Workforce, Ariba Invoice, Ariba eForms, Ariba Enterprise Sourcing, Ariba Supplier Network, BPM Services, Power Sourcing, Total Spend Capture and PO-Flip are trademarks or service marks of Ariba, Inc. All other trademarks are property of their respective owners.

Ariba Safe Harbor 

Safe Harbor Statement under the Private Securities Litigation Reform Act 1995: Information and announcements in this release involve Ariba's expectations, beliefs, hopes, plans, intentions or strategies regarding the future and are forward-looking statements that involve risks and uncertainties. All forward-looking statements included in this release are based upon information available to Ariba as of the date of the release, and we assume no obligation to update any such forward-looking statements. These statements are not guarantees of future performance and actual results could differ materially from our current expectations. Factors that could cause or contribute to Ariba's operating and financial results to differ materially from its current expectations include, but are not limited to: delays in development or shipment of new versions of Ariba's products and services; lack of market acceptance of Ariba's existing or future products or services; inability to continue to develop competitive new products and services on a timely basis; introduction of new products or services by major competitors; the ability to attract and retain qualified employees; difficulties in assimilating acquired companies; the impact of recent workforce reductions on Ariba's operations; lengthening sales cycles and the deferrals of anticipated orders; declining economic conditions, including a recession; inability to control costs; changes in the company's pricing or compensation policies; inability to successfully manage a reduction in the company's workforce; significant fluctuations in our stock price; the outcome of legal proceedings relating to the restatement of our financial statements; the possibility that stockholders or regulatory authorities may initiate additional proceedings against Ariba and/or our officers and directors as a result of the restatements; the impact of acquiring Alliente and Softface and entering into an agreement to acquire FreeMarkets, including the disruption or loss of customer, business partner, supplier or employee relationships; the level of costs and expenses incurred by Ariba as a result of such transactions; and the level of professional fees and expenses incurred by Ariba in connection with its previously disclosed accounting review and associated regulatory and litigation proceedings. Factors and risks associated with its business, including a number of the factors and risks described above, are discussed in Ariba's Form 10-Q filed May 17, 2004 and in its Form S-4 filed May 13, 2004.

FreeMarkets Safe Harbor

Statements in this press release that are not historical facts, including those statements that refer to FreeMarkets' plans, prospects, expectations, financial projections, strategies, intentions, and beliefs, are forward-looking statements. These forward-looking statements are based on information available to FreeMarkets today, and FreeMarkets assumes no obligation to update these statements as circumstances change. There are risks and uncertainties that could cause actual results to differ materially from the forward-looking statements, including, without limitation, market acceptance of FreeMarkets' products and services, the competitive nature of the market for GSM products and services, FreeMarkets' ability to predict its revenues and earnings, FreeMarkets' ability to develop competitive new products and services on a timely basis, introduction of new products and services by competitors, declining or uncertain economic and industry conditions, FreeMarkets' ability to attract and retain personnel and other risk factors that are described in more detail in FreeMarkets' most recent Annual Report on Form 10-K, and its other filings with the Securities and Exchange Commission.