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FreeMarkets Announces Expected Cancellation of General Motors Agreement

5 January 2000

FreeMarkets Announces Expected Cancellation of General Motors Agreement

    PITTSBURGH, Jan. 4 -- FreeMarkets, Inc.
announced today that it has been informed of General Motors Corporation's
intention to exercise its 90-day cancellation right under the terms
of its agreement with FreeMarkets.  Glen T. Meakem, Chairman and Chief
Executive Officer of FreeMarkets, stated, "We are proud to have served General
Motors since 1997 with our combination of proprietary Internet technology and
in-depth knowledge of supply markets.  We do not anticipate that the
cancellation of the General Motors agreement will have a material impact on
our revenue or results of operations in 2000.  We have continued to
successfully diversify our revenue base.  Although General Motors represented
17% of FreeMarkets' revenue through the nine months ended September 30, 1999,
this percentage had declined to approximately 10% in the quarter ended
December 31, 1999, and we had expected the percentage to decline further in
2000 even had our agreement continued."
    FreeMarkets creates customized business-to-business online auctions for
buyers of industrial parts, raw materials and commodities.  The company's
current clients include United Technologies Corp., The Quaker Oats Co.,
Emerson Electric Co., Honeywell International Inc. and the Commonwealth of
Pennsylvania.
    This press release contains forward-looking statements concerning revenue,
financial results and other matters.  There are risks and uncertainties that
could cause actual results to differ from those contained in the forward-
looking statements, including, without limitation, the completion of the year-
end audit of FreeMarkets' 1999 financial statements, and FreeMarkets' ability
to continue to execute agreements with new clients and to increase revenue
from existing clients.  These and other risk factors are described in detail
in FreeMarkets' prospectus dated December 9, 1999, which is included as part
of its Registration Statement on Form S-1, filed with the Securities and
Exchange Commission on December 9, 1999.