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                                                                 EXHIBIT 10.18

                                November 29, 2000


Dear Ed:

         I was saddened by your decision to move out of the role of Chief
Financial Officer of Ariba, Inc. (the "Company") but understand your personal
need to be able to spend more time with your family and with the activities
associated with the Kinsey Family Foundation. I would like to thank you for
your many contributions to Ariba. I know of your strong feelings for Ariba
and your support of what you have helped create and appreciate your desire to
provide a smooth transition to a new Chief Financial Officer ("CFO"). This
letter agreement (the "Agreement") is to confirm our agreed upon process for
the transition of your Chief Financial Officer role and your employment with
the Company.

         1.       You agree to work through, and the Company agrees to continue
                  to employ you through and until, your Resignation Date. For
                  purposes of this Agreement, your "Resignation Date" shall be
                  [*]. On the Resignation Date, you will cease being an
                  employee of the Company and you will be paid any earned but
                  unpaid salary and accrued vacation pay as of the Resignation
                  Date. You will continue to be paid your current salary and
                  provided all employee benefits for which you are eligible
                  through and until the Resignation Date.

         2.       You will continue to report directly to me during the
                  remainder of your employment with the Company. Effective
                  immediately, (i) you will no longer have the title of CFO,
                  (ii) you will no longer have any day-to-day responsibilities
                  as the Company's CFO or any duties as the Company's stock
                  compliance officer after the date of this Agreement, and (iii)
                  you will not be required to report to the office. Rather, you
                  may work from home unless you choose otherwise. You will
                  provide consulting services as requested by the Company
                  concerning (i) assisting investors or otherwise helping the
                  Company's relationship with investors (including attending the
                  analyst call for the Company's fiscal quarter ending December
                  31, 2000, in January 2001) and (ii) taking steps reasonably
                  necessary to facilitate the transition to a new CFO (such as
                  resigning as a director of the Company's subsidiaries and as
                  an authorized signatory on the Company's bank accounts). At
                  your request, all communications between you and me shall be
                  through [*]. You agree to comply with all of the Company's
                  policies through and until the


* Represents confidential information for which Ariba, Inc. is seeking
  confidential treatment with the Securities and Exchange Commission.

<PAGE>

                  Resignation Date. However, we both agree that you will not be
                  required to work more than [*] hours a week, but you may do so
                  if you choose.

         3.       The Company will reimburse you for any and all past and future
                  reasonable business expenses, and you agree to submit all
                  necessary documents regarding such expenses directly to [*]
                  for his sole review and approval in accordance with the
                  Company's expense reimbursement policy.

         4.       You understand and agree that you were granted an option to
                  purchase 640,000 shares of the Company's common stock on
                  January 27, 1999 at an exercise price of $0.5938 per share and
                  you are currently vested in 64,000 of those shares. You
                  exercised the option as to 64,000 shares. You were also
                  granted an option to purchase 50,000 shares of the Company's
                  common stock on April 17, 2000 at an exercise price of
                  $54.4375 per share and you are currently vested in 7,292
                  shares. You have not exercised this option as to any shares.
                  You will continue to vest in the shares under both options
                  through and until your Resignation Date. You will have until
                  three months after the Resignation Date to exercise the
                  options to the extent vested.

                  [*]

                  Your participation in the Company's Employee Stock Purchase
                  Plan will continue through the Resignation Date or any earlier
                  termination of employment or any earlier reduction in hours
                  worked to 20 hours per week or fewer. Any payroll deductions
                  accumulated but not used to purchase shares as of your last
                  day worked shall be refunded to you on your last day of
                  employment. You acknowledge that you have no other stock
                  rights in the Company (or any parent or subsidiary) other than
                  those rights enumerated in this paragraph and other than
                  shares you own and that are in your possession and all terms,
                  conditions and limitations applicable to the options pursuant
                  to your stock option agreements and the Company's 1996 Stock
                  Plan or 1999 Equity Incentive Plan shall remain in full force
                  and effect. All terms, conditions and limitations applicable
                  to the purchase rights pursuant to the Company's Employee
                  Stock Purchase Plan shall remain in full force and effect. All
                  share numbers in this paragraph are subject to adjustment in
                  accordance with the principals set forth in Article 11(a) of
                  the 1999 Equity Incentive Plan.


* Represents confidential information for which Ariba, Inc. is seeking
  confidential treatment with the Securities and Exchange Commission.

<PAGE>

         5.       You agree that the only payments and benefits that you are
                  entitled to receive from the Company in the future are those
                  specified in this letter or the terms of the Company benefit
                  plans at issue. You will be entitled to continue your medical
                  coverage under COBRA after your Resignation Date.

         6.       In consideration for the Company's agreement [*], its
                  agreement to continue your employment through and until the
                  Resignation Date and the release of claims set forth below,
                  you waive and release and promise never to assert any
                  claims or causes of action, whether or not now known,
                  against the Company or its predecessors, successors, or
                  past or present subsidiaries, officers, directors, agents,
                  employees and assigns, with respect to any matter,
                  including but not limited to, any matter arising out of or
                  connected with your employment with the Company or the
                  resignation of that employment, including without
                  limitation, claims of wrongful discharge, emotional
                  distress, defamation, fraud, breach of contract, breach of
                  the covenant of good faith and fair dealing, any claims of
                  discrimination or harassment based on sex, age, race,
                  national origin, disability or on any other basis, under
                  Title VII of the Civil Rights Act of 1964, as amended, the
                  California Fair Employment and Housing Act, the Age
                  Discrimination in Employment Act of 1967, as amended, and
                  all other laws and regulations relating to employment.
                  Furthermore, we also agree that nothing in this Agreement
                  waives any rights you have to (i) unemployment or workers'
                  compensation benefits; (ii) indemnity and defense rights
                  under CALIFORNIA LABOR CODE Section 2802, the Company
                  By-laws or any other written agreement between you and the
                  Company; and (iii) vested benefits under any ERISA benefit
                  plan such as, for instance, a section 401(k) plan; all such
                  rights are expressly reserved by you.

                  The Company waives and releases and promises never to assert
                  any claims or causes of action, whether or not now known,
                  against you with respect to any matter, including but not
                  limited to, any matter arising out of or connected with your
                  employment with the Company or the termination of that
                  employment, including without limitation, claims of
                  defamation, fraud, breach of contract or breach of the
                  covenant of good faith and fair dealing.

                  You and the Company understand that nothing in this agreement
                  prohibits you or the Company from bringing any claims against
                  the other arising out of any alleged breach of this agreement
                  and that such claims shall be resolved as set forth in
                  paragraph 7 below.

         7.       Any controversy involving the construction or application of
                  any terms, covenants or conditions of this letter, or any
                  claims arising out of any alleged breach of this letter, will
                  be governed by the rules of the American Arbitration
                  Association and submitted to and settled by final and binding


* Represents confidential information for which Ariba, Inc. is seeking
  confidential treatment with the Securities and Exchange Commission.

<PAGE>

                  arbitration in Santa Clara County, California, except that any
                  alleged breach of the Company's Proprietary Information and
                  Inventions Agreement shall not be submitted to arbitration and
                  instead the Company may seek all legal and equitable remedies,
                  including without limitation, injunctive relief.

         8.       You and the Company expressly waive and release any and all
                  rights and benefits under Section 1542 of the Civil Code of
                  the State of California (or any analogous law of any other
                  state), which reads as follows: "A general release does not
                  extend to claims which the creditor does not know or suspect
                  to exist in his favor at the time of executing the release,
                  which, if known by him, must have materially affected his
                  settlement with the debtor."

         9.       Nothing contained in this letter shall constitute or be
                  treated as an admission by you or the Company of liability, of
                  any wrongdoing, or of any violation of law.

         10.      The Company agrees that during the remainder of your
                  employment with the Company and at all times thereafter it
                  shall indemnify you to the full extent required by applicable
                  law.

         11.      At all times in the future, you will remain bound by the
                  Company's Proprietary Information and Invention Agreement
                  dated September 17, 1996, a copy of which is attached.

         12.      You agree that until the later of your Resignation Date or
                  [*], you agree not to, directly or indirectly on behalf of
                  yourself or any other party, solicit, induce or encourage
                  any employee or consultant to terminate any employment or
                  business relationship with the Company for any reason.

         13.      You agree that at all times in the future, you will not make
                  any derogatory remarks regarding the Company or its officers,
                  directors, products or business practices. The Company agrees
                  that at all times in the future its officers and directors
                  will not make any derogatory remarks regarding you or your
                  employment with the Company to any party inside or outside of
                  the Company.

         14.      You agree that you will not disclose to others the fact or
                  terms of this letter, except that you may disclose such
                  information to your attorneys or accountants. Also, you may
                  disclose this Agreement to the extent required by law.

         15.      You agree that except as expressly provided in this letter,
                  this letter renders null and void any and all prior agreements
                  between you and the Company regarding your employment. You and
                  the Company agree that this letter agreement constitutes the
                  entire agreement between you and the Company regarding the
                  subject matter of this agreement, and that this


* Represents confidential information for which Ariba, Inc. is seeking
  confidential treatment with the Securities and Exchange Commission.

<PAGE>

                  letter agreement may be modified only in a written document
                  signed by you and a duly authorized officer of the Company.

         16.      This agreement shall be construed and interpreted in
                  accordance with the laws of the State of California.

         17.      This agreement may be executed in counterparts, each of which
                  shall be an original, but all of which together shall
                  constitute one agreement.

         18.      You have up to twenty-one (21) days after receipt of this
                  letter within which to review it, and to discuss it with an
                  attorney of your own choosing regarding whether or not you
                  wish to execute it. Furthermore, you have seven (7) days after
                  you have signed this letter during which time you may revoke
                  this agreement.

         19.      If you wish to revoke this agreement, you may do so by
                  delivering a letter of revocation to me. Because of this
                  revocation period, you understand that the agreement set forth
                  in this letter shall not become effective or enforceable until
                  the eighth day after the date you sign this letter.

         Please indicate your agreement with the above terms by signing below.


                                              Sincerely,

                                              /s/ Keith J. Krach
                                              ------------------------------
                                              Keith J. Krach




         My signature below signifies my agreement with the above terms.
Furthermore, I acknowledge that I have read and understand this letter and
that I sign this release of all claims voluntarily, with full appreciation
that at no time in the future may I pursue any of the rights I have waived in
this release.


Signed:             /s/ Edward P. Kinsey            Dated: November 29, 2000.
        -----------------------------------------
                     Edward P. Kinsey





* Represents confidential information for which Ariba, Inc. is seeking
  confidential treatment with the Securities and Exchange Commission.