Here's a story that could have been lifted straight from the Internet Textbook (see index under "Speed and duration," and "Youth, barriers to entry, absence of").

Last February, Jon Burgstone and Asif Satchu were 27. They'd done a bit of work in technology (Burgstone as an Internet consultant, Satchu for a Net telephony firm), finance (Satchu at, among others, Morgan Stanley & Co.) and manufacturing (Burgstone as a purchasing manager for Ford Motor Co.).

The pair pureed those sector experiences and came up with SupplierMarket.com Inc., an online marketplace where purchasing agents for manufacturers could buy factory parts and supplies.

Through the latter half of 1999, hype over business-to-business exchange websites was at its frothiest. CEO Burgstone and President Satchu had no trouble attracting an $8 million first round of funding, and along with it good engineers and plenty of buzz about their site.

On the day of its October launch, SupplierMarket had signed up more than 1,000 manufacturers looking to trade at the site, from small fry to industrial giants. Within two months, that number was 5,000, which had combined to put up more than $100 million in equipment for sale.

They'd also attracted $40 million in venture backing, with Battery Ventures (32 percent of company shares), Sequoia Capital (13 percent), Fenway Partners (6 percent) and Aurora Investments (6 percent) taking sizable pieces of the business. The entrepreneurs used their cash to move to new Burlington offices, build a staff of 150 and conduct some target marketing.

This was in the dying months of 1999, when Pittsburgh online industrial auctioneer FreeMarkets (FMKT) saw its stock price zoom above 250 on its first trading day, and when B2B sector players Ariba (ARBA), CommerceOne (CMRC) and i2 Technologies (ITWO) were in the midst of a 6-month runs that saw share prices zoom from below 20 to 170, 140 and 220, respectively.

In early March, with the B2B fury still at a peak, Burgstone and Satchu figured, Why wait? They filed to bring SupplierMarket.com onto the Nasdaq, despite just over four months in business and a balance sheet that showed 1999 losses of $6.1 million on revenues of about $50,000.

Then came the Nasdaq deluge, which hit the B2B sector with particular fury. FreeMarkets, Ariba, CommerceOne and i2 all lost around 70 percent of their trading value in just eight weeks.

As the Brits say, that threw a spanner in SupplierMarket.com's IPO works. The company stuck a toe in the water by pricing its offering in April, with 10 million shares tentatively priced at $9-11 a share -- not bad, but a pittance compared to what it could have expected just four weeks before.

The markets have solidified since, but in the meantime Burgstone and Satchu had changed tactics and begun listening to offers. And when Ariba Inc., the Silicon Valley firm that makes software for a range of B2B exchanges, came calling, the pair decided to accept.

The companies announced last evening that Ariba had agreed to exchange 6.3 million shares for all shares in SupplierMarket.com. With Ariba at 92.1875 at market's close Monday, that made the deal (expected to close in the third quarter) worth $581 million.

And it gave Burgstone and Satchu, each of whom retained an 11.4 percent stake in their company, a stock holding worth, for the moment, about $66 million apiece. Not bad for 16 months of work.

Ariba sells software to B2B exchanges, who use it under their own brands. Buying SupplierMarket will allow Ariba to offer to those exchanges' customers the ability to quickly find sellers of supplies and materials, either through auctions or by finding trading partners -- a facet known as "sourcing."

Aberdeen Group B2B researcher Tim Minahan calls sourcing the best way for businesses to cut procurement costs and overhaul supply chains. And it should give Ariba a key tool in its drive to corner the B2B exchange market.

The deal has some of the metrics that made people so excited about B2B exchanges in the first place. It will give Ariba 12,000 new suppliers to its existing base of 20,000, while allowing suppliers anywhere to register with a standard Web browser. And it adds SupplierMarket's expertise in raw materials and engineered products markets, complementing Ariba's base in the direct materials market

The markets have not reacted with immediate favor. A positive review from UBS Warburg analyst Andrew Roskill, who raised his price target on Ariba from 90 to 110, helped ARBA recover from a near-5 percent drop in morning trading. At 1 p.m. the stock was down just 75 cents, less than 1 percent, to 91.4375.

SupplierMarket.com was one of boston.internet.com's 20 for 2000 companies.