At the beginning of last year, some of the fiercest competitors in many an industry put aside their differences, at least for a while, and established consortium-based vertical marketplaces (CBVMs)—novel institutions that were supposed to embody the future of business-to-business (B2B) commerce. Before they appeared on the scene, independent vertical e-marketplaces founded by venture capitalists and other industry outsiders had been attempting to create liquid electronic markets for goods used by specific industries. The founders of these independent marketplaces often had simple goals: to streamline the participants' purchasing and procurement processes by building a common information technology platform. Such marketplaces were usually thought to favor neither buyers nor suppliers; their goal was to become profitable entities in their own right.

A CBVM, by contrast, is a joint venture among industry incumbents, with the ultimate goal of improving their performance and that of the industry as a whole.1 Accordingly, an initial public offering isn't always a part of the plan. As the 53 members of the Worldwide Retail Exchange—including Edeka, Kmart, and Toys "R" Us—have affirmed, "All benefits generated by the exchange will flow to its participants." Press releases have trumpeted a vision of trillions of dollars pouring through...