On its first day of trading, FreeMarkets stock climbed more than 440 percent. The Pittsburgh company ran a strange kind of auction. Buyers set the job, such as die-cast pistons for an engine, and suppliers bid against each other in real time to go lower. A graph on the screen showed the price dropping minute by minute. By December 1999 the dot-com boom had reached its peak, and business-to-business marketplaces were the newest craze.

A McKinsey Man in Steel Country

Glen Meakem had worked at McKinsey on industrial sourcing, then at General Electric. In 1995 he and Sam Kinney started the company that became FreeMarkets. Their bet was that big buyers paid too much for parts because they only talked to a few suppliers at a time. FreeMarkets found suppliers, prepared the bid, and ran the event on its BidWare software. Clients included General Electric, Emerson Electric, Navistar and Owens Corning.

Five Times the Price by Lunch

FreeMarkets priced its IPO at $48 a share on December 10, 1999. By that afternoon the stock traded above $260 on Nasdaq, one of the biggest first-day jumps of the boom. The high did not hold. When the bubble burst, the shares fell with the rest of the B2B sector. In January 2004 Ariba agreed to buy FreeMarkets in a stock deal worth about $493 million, and FreeMarkets CEO Dave McCormick became Ariba's president.

Cover: The Auction House: The Dealers, Charles Maurand. Art Institute of Chicago, public domain. Chosen for dealers crowding an auction house (bidding).