NEW YORK (CNN/Money) - "Business-to-business exchange reports record volumes at the close of Q1." That's hardly the kind of headline one would expect from a press release issued in April 2002.

Boastful B2B headlines were a common sight a couple of years ago, but over time, B2B has come to seem like another one of those buzzword-driven, Internet-bubble fads. Remember CommerceOne (CMRC: up $0.01 to $1.27, Research, Estimates) and Ariba (ARBA: down $0.22 to $3.92, Research, Estimates)? The stock prices of both companies mirrored the rise and fall of B2B hype.

But online B2B isn't dead. Take, for example, Intercontinental Exchange, the company that issued the release above. Its International Petroleum Exchange, an online futures market for a number of energy-related products and materials, just recorded its best March in the exchange's 21-year history.

And on March 18, the U.S. Census Bureau released a report showing that during the calendar year 2000, online B2B revenues trounced retail results. (The bureau doesn't send out its questionnaires until the end of the calendar year; 2001 figures won't be available until February 2003.) According to the report, B2B accounted for 94 percent of all e-commerce transactions, and the manufacturing sector alone -- the largest sector in the study -- reported $777 billion in e-commerce shipments for the year. In contrast, online retail sales came in at less than $29 billion.

"The numbers are larger than what we thought they would be," admits Tom Mesenbourg, assistant director of economic programs for the Census Bureau.

Businesses today are relying more than ever on the Internet and Web technology to facilitate communication, shipments, and transactions, cut costs, and save money -- gasp! -- just as many pundits predicted they would five years ago. Reports of online B2B's death were, as they say, exaggerated.

"Part of the reason [for the B2B backlash of a year and a half ago] was a disappointment from revenues associated with valuations of companies that overestimated their own success," says Eric Brown, a research director at Forrester Research. "That's not to say that the impact of these process changes were overblown. Companies are realizing the benefits."

At a time when anemic corporate profits are still the rule and not the exception, cost-cutting in operations has become a big priority for many companies -- and the Internet stands as the quickest means to get it done. Meanwhile, many economists point to the increasing use of information technology to explain the tremendous jump in productivity seen during the late 1990s. The productivity gap between an average company and a technology leader jumped to 40 percent in 2000, up from 15 percent in 1975, according to a study published in January by economists Jason G. Cummins and Giovanni L. Violante.

That's not to say any company that exploits online B2B exchanges deserves your investment. A shakeout has already occurred in B2B markets, and rightfully so. Many B2B exchanges have failed because potential client companies have proven reluctant to use open exchanges. "Companies view their productivity enhancement as a competitive advantage, and they don't want everyone to share that advantage," says Forrester senior analyst Jim Walker. "To go into a public marketplace where everyone has the same technology, what's the competitive advantage?"

And, to be sure, many of the B2B software companies and exchanges have fallen far. Software maker i2 traded for $96.25 on Sept. 28, 2000. On April 5, it was trading for $4.84. Ariba's drop has been even more precipitous, falling from a high of $168 to its current share price of about $4. But there are several companies worth keeping your eye on, as more firms move more processes online.

Walker points to Haht (which is currently private) and Keane as two companies doing well, as well as powerhouses IBM (IBM: down $11.75 to $85.50, Research, Estimates), Microsoft (MSFT: down $1.32 to $54.55, Research, Estimates), and Siebel (SEBL: down $1.26 to $26.62, Research, Estimates). Other companies to watch include E.piphany, led by Silicon Valley wunderkind Roger Siboni. E.piphany reported less-than-expected losses in the first quarter of this year, and has seen its stock price, though down, not record the drops its peers have seen. It's also worth updating your "watch" ticker to include supply-chain software maker Manugistics, whose stock is up more than 200 percent since September 2001.

When you think about it, none of this should come as a big surprise. It simply follows a predictable pattern of technology: A new technology is introduced, it gets overhyped, dozens of companies emerge to exploit it, a shakeout occurs, and finally, a few years later, real productivity gains emerge. That's where some B2B survivors find themselves today.

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