In February of 2000 -- when business-to-business e-commerce was all the rage -- Covisint was created by DaimlerChrysler AG
As a result of the acquisition, FreeMarkets -- which claims to have helped the auto industry source $20 billion in goods at savings of $3.5 billion -- effectively eliminates its major competition in the automotive supply chain space.
Under terms of the deal, Covisint will transfer its customer contracts for auction services to FreeMarkets. These contracts bring committed revenue over the next three years. In addition, FreeMarkets will provide its own sourcing technology and services to the Big Three. FreeMarkets may also provide those services to Covisint's other auction services customers, which include Mitsubishi, Nissan, Renault, PSA Peugot, and Fiat.
FreeMarkets itself has disappointed investors to this point. But even though it may never again see its December 1999 price tag of over $300 per share, FreeMarkets no doubt is in a little better shape without competition.
Jeff Hwang can be reached at JHwang@fool.com.