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FreeMarkets OnLine Creates Pact with General Motors

17 September 1998

FreeMarkets OnLine Creates Pact with General Motors; Global Automobile Manufacturer Adopts Revolutionary Online Marketplace

    PITTSBURGH, Sept. 17 -- FreeMarkets OnLine, Inc., the world's
first and leading online industrial market maker, today announced it has
signed a contract with General Motors Corp. , under which it will
provide its unique online market channel to the automaker.
    Glen Meakem, FreeMarkets' President, CEO and Co-founder, said the deal is
based on creating a virtual marketplace for automotive suppliers to bid on
"direct material components" for automobile production and assembly.
Financial and other terms of the deal were not disclosed, but with 1997
revenues of $178 billion, GM is the world's largest buyer of parts and
materials for assembly into automobiles.
    "This agreement marks the beginning of an important trend in American
industry," said Mr. Meakem.  "A major automobile manufacturer is replacing the
traditional negotiations between its purchasing department and automotive
suppliers with our online markets.  GM's size and importance to the economy
validate the role of online markets for direct material components and
commodities.  Large buyers that are slow to embrace this approach will pay a
price because they will have higher costs than their early adopting
competitors."
    Under the agreement, GM will subscribe to the FreeMarkets OnLine(R) global
online marketplace which is built upon FreeMarkets' BidWare and BidServer
technologies.  FreeMarkets will manage all aspects of the marketplace and will
provide its unique market making process.
    Mr. Meakem said the deal is indicative of FreeMarkets' explosive growth
and its ability to generate results across a broad spectrum of industries.
Fueling this growth has been FreeMarkets successful "market-making" in product
categories ranging from printed circuit boards to machined parts.  "Nobody
else in the broad electronic commerce or online market industries focuses on
production material", says Meakem.  "Production materials require a whole
different level of understanding.  That's our business, and that's what GM
recognized."
    Market volume in FreeMarkets' online market channel across all of its
clients is forecasted to increase from $100 million in 1997 to approximately
$500 million in 1998.  Staffing has skyrocketed from just two employees in
early 1995 when the company was founded, to more than 85 today and should
exceed 100 by year-end.

    About FreeMarkets OnLine
    FreeMarkets is the world's first and leading industrial market-making
company.  Using its proprietary BidWare(R) software suite, the company creates
custom online markets for large buying organizations.
    Since 1995, FreeMarkets' revenue has grown close to 400 percent annually
and its staff has increased from two to more than 85 technical, support and
market-making professionals.  Its client list now boasts some of the world's
largest companies.
    In recognition of its bold business strategies, success and spirit,
FreeMarkets OnLine recently received the Ernst & Young Entrepreneur of the
Year Award for Western Pennsylvania.

    For more information visit http://www.freemarkets.com.