Employment Agreement - Ariba Inc. and Michael Schmitt


                               [Ariba letterhead]

February 21, 2001


Mr. Michael Schmitt
28 Cherry Hills Farm Drive
Cherry Hills Village, CO  80110

Dear Michael:

On behalf of Ariba, Inc. I am pleased to extend this invitation to you to join
Ariba in the capacity of Senior Vice President and Chief Marketing Officer. The
Ariba team is very impressed with your qualifications and believes that
attracting outstanding individuals like you is key to our success.

Your base pay as Senior Vice President and Chief Marketing Officer initially
will be $20,833.34 per month payable in arrears in two equal portions on the
15th and last working day of each month. You will be eligible to participate in
the FY2001 Executive Bonus Plan. Under this plan you will receive a cash bonus
that is targeted at $200,000.00 on an annualized basis depending on the
completion of specific goals and objectives.

Ariba will also relocate you and your family from Colorado to our Mountain View
Headquarters. Please see the Ariba Relocation Policy attached.

Subject to the terms of the Ariba, Inc. 1999 Equity Incentive Plan (the "Plan"),
you will be awarded the right to purchase 500,000 shares of the Company's Common
Stock. Options are normally priced at a meeting of the compensation committee of
the Ariba Board which generally meets monthly. Your option will be granted in
the month following your hire date. You may exercise this right subject to the
terms of the Plan, a copy of which may be obtained from the Company.

Upon approval, you will enter into an option agreement with the Company that
specifies the standard terms and conditions of this stock option. Three months
from the vesting commencement date, you may exercise the option to purchase up
to 3/48th of the total number of shares. Thereafter, you may exercise 1/48th of
the shares granted upon completion of each month of service. Should your
employment terminate for any reason, your option will cease to continue to vest
as of your termination date and you may exercise any vested portion of your
shares within 3 months of termination.

You will be provided with benefit choices, including medical, dental, vision,
life and disability insurance coverage for you and your dependents, as well as
participation in the 401(k) and Employee Stock Purchase plans. The provisions of
these and other benefits offered by Ariba are explained more fully in the
enclosed Employee Benefits Summary. To aid in the timely processing of your
benefits enrollment form, it is important that you complete and sign the
enclosed Personal Data form, omitting the Qualifying Life Change section and
return it with your signed offer letter.

You will be required to sign the Ariba Employee Agreement. In this document you
will be asked to agree to the following: 1) to hold the Company's proprietary
information confidential during and after employment; 2) that you have not
brought any former Employer's proprietary information or any of their clients'
proprietary information with you; and 3) that you will agree to assign to the
Company any patentable inventions that you created through your work with the
Company.

Employment with Ariba is for no specific period of time. As a result, either you
or Ariba may terminate your employment at any time for any reason, with or
without cause.

 
Michael Schmitt
February 21, 2001
Page 2


This is the full and complete agreement between you and the company regarding
this term. This at-will employment relationship may only be changed in a
document signed by both you and Ariba's Chief Executive Officer.

As required by federal law, Ariba must verify that its employees are eligible to
work in the United States. On your first day of employment, you will be required
to certify that you are a citizen or lawful permanent resident or an alien
authorized to work in the U.S. Please bring your Employment Eligibility
Verification (Form I-9) and acceptable supporting documents (as listed on the
reverse side of the I-9 Form) to your first day of work. If you expect to have
any difficulty in producing these documents, please contact our Human Resources
Department prior to your employment to discuss alternative suitable
documentation. Ariba understands that you may need to obtain an employment visa
to undertake this employment. In the event your employment needs visa
sponsorship, your employment is contingent upon you receiving the appropriate
visa petitions through the Immigration and Naturalization Service.

Upon acceptance, please sign both copies of the Offer Letters and Employee
Agreements. Retain one copy each for your personal records. Please return one
signed and completed copy of the Offer Letter, Employee Agreement, and Personal
Data form to the Ariba Talent Acquisition Department in the envelope provided.
Please note that these documents must be received, by mail or fax, prior to your
start of employment with Ariba. This letter supersedes any prior representations
or agreements written, verbal or otherwise regarding the terms described above.
This offer will remain open for five days from the date of this letter.

Michael, I am looking forward to working with you in continuing to build a
company that provides great value to its customers and employees. I believe that
you have much to offer and much to gain - personally, professionally, and
financially - in sharing this exciting opportunity.

Sincerely,

Larry Mueller
President & COO
Ariba, Inc.

Accepted:

/s/ Michael Schmitt                                  2/22/01           
-----------------------------------                  ---------------------------
Michael Schmitt                                      Date

Planned start day:         2/26/01