Accelerating a consolidation trend in the market for procurement software and services, Ariba, Inc. will acquire FreeMarkets, Inc. for $493 million in stock and cash. The deal, which creates a company with combined annual revenues of $360 million, bolsters the services portion of Ariba's business, adding FreeMarkets' application development, consulting, benchmarking and procurement outsourcing to Ariba's spend management software products such as Ariba Buyer, Ariba Analysis and Ariba Contracts. The acquisition follows Ariba's recent purchases of business process outsourcing (BPO) service provider Alliente. FreeMarkets acquired the procurement outsourcing services business of Covisint at the end of December. Although Ariba saw a 14% drop in Q1 2004, bringing revenues to $52.7 million, the company reported $6.1 million in net earnings compared to a loss of $58.7 million in the first quarter of 2003