Newly emerging electronic marketplaces have significant implications for the choice of governance mechanisms used by firms. This paper builds on transaction cost and routine based perspectives in analyzing buyersí decision to use IT-enabled market mechanisms such as reverse auctions. The study argues that buyers are less likely to adopt reverse auctions for products with higher degrees of noncontractibility. A significant contribution of this study lies in operationalizing and validating the concept of noncontractibility as an explanatory variable for predicting buyer adoption of electronic marketplaces. We argue that the notion of noncontractibility addresses the mixed predictions in previous research concerning the impact of IT on firm boundaries as evident in the electronic market and move to the middle hypotheses.