Maybe birds of a feather don't flock together.

When it comes to business-to-business e-commerce stocks, no two stocks are more closely identified with each other -- or the sector as a whole -- as

Ariba

(ARBA)

and

Commerce One

(CMRC)

. Both make exchange and procurement software that allows companies to buy and sell materials over the Internet. Both are pioneers, and both can brag about splashy deals and partnerships aimed at changing the way the world does business.

So why did Ariba recently smash through the $20 billion market-cap level while Commerce One sits well below $10 billion? Why has Ariba rebounded 70% since its recent low on April 17, while Commerce One has risen just 18% since then?

The easy answer: The companies aren't as similar as some people assume. In fact, there are significant differences that any B2B investor needs to consider. While both are still pounding the table about the promise of B2B, they've taken different approaches to the sector. And those differences may be apparent when the two companies report earnings. Ariba is expected to announce earnings after the close on Wednesday, and Commerce One is slated for next week.

"When Ariba and Commerce One first came

public, they were almost exactly the same company," says Todd Weller, an analyst with

Legg Mason Wood Walker

who has a buy rating on Commerce One but has no rating on Ariba. (His firm has done no underwriting for either company.) "Now, they've started to diverge."

Parting Ways

Both companies, Weller says, began with a focus on procuring so-called indirect goods, or things not used in the manufacturing process such as paper, pens and office supplies.

But Commerce One soon began targeting the huge industry exchanges, like the one being set up by Detroit's Big Three. Those exchanges want to move manufacturing materials -- stuff like plastics, metals and machine parts -- between different companies. The market for these materials is huge, with estimates reaching into the trillions of dollars, but it also represents an entirely new way of doing business.

"If both stories work out how the companies want them to, Commerce One will be a bigger success," says Brian Salerno, co-manager of the

(MNNAX) - Get Report

Munder Netnet fund, which is long Ariba but doesn't own Commerce One. "But for that to be the case, something has to happen in business that's never happened before. I think the likelihood of actually pulling it off would have to favor Ariba."

Other factors have turned the tide against Commerce One as well. Soon after the frenzy over B2B exchanges got under way at the beginning of the year, questions started to emerge about how these "industry consortiums" with the likes of

General Motors

(GM) - Get Report

,

Ford

(F) - Get Report

and

DaimlerChrysler

(DCX)

partnering, would work together. Analysts also questioned whether they would be able to charge transaction fees for the goods traded over them.

Then Washington started showing an interest in B2B exchanges. The

Federal Trade Commission

held a two-day workshop in June to look at antitrust issues that online B2B exchanges raise, and the specter of government regulation further weighed on Commerce One's stock. (

TSC

wrote about the workshop last month.)

The Basics

Meanwhile, Ariba was plodding along to add extras and customers to its indirect-goods procurement platform. While it hasn't shunned exchange opportunities -- it recently landed a deal to help power

Omnexus

, a marketplace for the plastics injection molding industry with the backing of

Dow Chemical

(DOW) - Get Report

and

DuPont

(DD) - Get Report

-- it continued to concentrate on indirect goods, and now boasts more than 170 customers on its procurement network.

All of this puts Ariba in the improbable position of exhibiting a more traditional business model -- at least in investors' eyes -- in a space that's changing as fast as it's growing.

"Ariba, in my eyes, is going after more of the midlevel software market, and most investment managers are comfortable with that because we've seen that kind of company in the past," says Ryan Jacob, who is long Commerce One in the

(JAMFX) - Get Report

Jacob Internet fund. "With Commerce One, there are more unknowns, but they're going after a much larger opportunity."

That opportunity is so large, in fact, that Commerce One announced in June that it would acquire Internet consulting firm

AppNet

for $1.17 billion in stock because of the dire need for people to help build the exchanges it's selling. But that was greeted with more negativity by the Street.

A Need for Bodies

"They're acquiring a company with more than 1,000 consultants, which, from a long-term strategic perspective makes sense, but it will affect their ability to grow margins as quickly as before," says

Pacific Growth Equities

analyst Bala Srinivasa, who rates Commerce One a buy and has no underwriting relationship with the company. "Investors are trying to get more comfortable with the huge services business that Commerce One is trying to build."

On the other hand, not everyone is comfortable with Ariba's lofty valuation at 155 times trailing sales -- no matter how "traditional" its model now seems.

"I don't follow Ariba too closely largely because of its $20-plus billion market cap," says Drew Cupps, manager of the

(SENTX)

Strong Enterprise fund, which is long Commerce One. "I own Commerce One largely because of its $6 billion market cap. For anyone who has any valuation sensitivity, that's one of the attractions."

No doubt, as this round of earnings reports revs up in the B2B sector, the viability of different business models and strategies will be scrutinized even further, and which will ultimately be successful is still anyone's guess. But one thing's for sure. In the B2B sector, it's becoming clear that these two leaders are starting to fly in very different directions.