Only a few months ago, online business-to-business exchanges seemed like the next way for investors to cash in on the Internet. By connecting buyers and sellers of industrial goods in an electronic marketplace, these exchanges would prosper by taking a sliver of thousands and thousands of transactions. When

Ford Motor

(F) - Get Report

announced its auto-parts exchange, Internet investment bankers figured it easily could go public with a $50 billion valuation.

You don't hear that kind of chatter anymore. Thomas Berquist, who follows online exchange companies for

Goldman Sachs

in Menlo Park, Calif., reckons the chatter is gone for good because it looks as though the

profits from such exchanges may not be as valuable as the function the services provide in protecting the incumbent industry's franchise.

He now questions whether the Ford-led project (since dubbed

Covisint

and expanded to include

General Motors

(GM) - Get Report

and

DaimlerChrysler

(DCX)

) will actually go public. "There's a good chance

most of these companies won't go public," says Berquist. The companies that sponsor them, he adds, are "really more interested in protecting their margins."

But he's still following the exchange business carefully because there is another way that he -- and other investors -- can make money from this sector. How? By buying into the companies that sell the technology to make these systems work. Berquist has assembled a list of 34 announced industry consortia like Covisint and is monitoring where they are placing their technology orders.

Berquist's list, a work in progress, shows where the opportunity lies for technology providers. Half of the projects on his list haven't chosen who'll power the operation. Most of the rest are being handled by one or a combination of what Berquist calls the Big Four:

Commerce One

(CMRC)

,

i2

(ITWO)

,

Oracle

(ORCL) - Get Report

and

Ariba

(ARBA)

. Goldman maintains the highest ratings on the first three, all banking clients. It doesn't yet follow Ariba, a banking client of

Morgan Stanley Dean Witter

.

There's no doubt that Berquist's colleagues would love to have taken some of the 34 public. But from his perspective, it almost doesn't matter if they become independent companies. "Every single one of them is buying technology," he says. "So as much as I worry about business models

of the consortia, I don't worry about them buying technology."

He also observes that the exchange business has changed the dynamics of the software market that serves it. Back when the enterprise software market was developing, if a company like

Baan

(BAANF)

or

SAP

(SAP) - Get Report

failed to nail down a customer in, say, the automotive industry, it could try another business, like steel. That's how scores of enterprise software companies limped along for years before the field was winnowed.

Today, each industry consortia is making a decision about technology right away. "The mindshare in these early years is going to be very important," he says. "The bulk of the selections will be made in the first few years of the cycle."

Berquist clearly is uncomfortable with the still-outsized valuations on the likes of Commerce One and i2, both of which supply software that helps exchanges manage their operations. But he still believes the growth will be huge. "I think you still have to trade them a bit," he says. Translation: Wait for the inevitable snapback to buy.

When The Going Gets Rough

When times are good, newly public companies often hit the road to sell more shares to the public in secondary offerings. This accomplishes two goals: raising more money and allowing insiders an opportunity to get out in an orderly fashion. As

Freemarkets

(FMKT)

is showing, when the going gets rough -- Freemarkets shares have gone from 370 to as low as 37 -- the tough keep going on their roadshows.

Faced with the expiration of lockup restrictions on its shares this week (ably

documented Monday by Mr. Nothing but Net (aka

David Shabelman

), Freemarkets decided to hit the road anyway. Aided by investment bankers at Goldman Sachs, the company is on an eight-city tour of portfolio managers -- the exact same types they'd be seeing on a secondary roadshow.

The thinking is that as insiders prepare to dump large amounts of shares, it pays to market those shares to institutional investors. A Freemarkets spokeswoman says the five-day road trip is "something we do all the time." But, she allows, the timing is pretty good this time.

James J. Cramer

already

explained how the short-the-expiration game has ended because the investing public is on to the game. Perhaps that explains in part why shares of Freemarkets were up 6% Monday to 54 3/4 in front of the big, bad event.

The Ax of Tibco

Goldman Sachs analyst Anne Meisner is so enthusiastic about

Tibco Software

(TIBX)

that she calls herself the "ax" on the stock (the analyst with the best information and ability to move the stock) and confidently boasts about her access to management and Tibco employees. She intimates, without providing details, that at least one very large customer win is in the works, an event that should create some buzz around a company sometimes overlooked because it supplies less-than-sexy infrastructure software for the Internet.

Palo Alto, Calif.-based Tibco makes software that, among other things, enables multiple communications among multiple devices, like the system that controlling shareholder

Reuters

(RTRSY)

uses to distribute its news and market data to clients. Meisner notes that Tibco's recently announced triumph of being embedded in

Cisco's

(CSCO) - Get Report

Internet operating system (IOS) is another example of why the company, a Goldman investment-banking client, is one of her favorites.

At Monday's close of 71 13/16, however, Tibco's shares already are up 58% from the recent low of 45 1/2 on May 24, and Meisner warns that the volatility is likely to continue, especially before Tibco's announcement of fiscal second-quarter earnings on June 21. After all, Tibco's shares have fallen at least to 45 twice since April 4, only to recover by crossing 60 again.

But Meisner goes beyond merely placing Tibco on Goldman's recommended list, its highest rating. She advertises for the company as well. Mid-explanation about why Tibco is so great, it is pointed out to her that she's holding a rather expensive-looking Tibco pen in her hand. She explains that such boosterism really became a problem only once: when she carried the pen into a meeting with a Tibco competitor.

Lesson learned.

Adam Lashinsky's column appears Tuesdays, Wednesdays and Fridays. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Lashinsky writes a column for Fortune called the Wired Investor, and is a frequent commentator on public radio's Marketplace program. He welcomes your feedback at

alashinsky@thestreet.com.