Goldman Sachs downgraded FreeMarkets (FMKT

) to market perform from market outperform.

Analyst Chris DeBiase says despite improving customer metrics, some longer-term risks are beginning to unfold more quickly than he had anticipated. He says the company lowered its top-line revenue guidance for the second half of the year as renewals with existing customers, and an increased number of pilot and long-term customers, has not equated to revenue growth.

DeBiase thinks that this is occurring for three reasons: pricing pressure, cannibalization of the company's more lucrative product offerings, and overall economic weakness. He is keeping his $0.25 2002 earnings per share estimate and cut the $0.45 2003 earnings per share estimate to $0.30.