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With the advent of the new generation of Internet-based technology, in particular, web services, the automation of business activities that are distributed across multiple enterprises becomes possible. Business activities are different from traditional transactions in that they are typically asynchronous, loosely coupled, and long running. Therefore, extended transaction protocols are needed to coordinate business activities that span multiple enterprises. Existing extended transaction protocols typically rely on compensating transactions to handle exceptional conditions. In this paper, we identify a number of issues with compensation-based extended transaction protocols and describe a reservation-based extended transaction protocol that addresses those issues. Moreover, we define a set of properties, analogous to the ACID properties of traditional transactions that are more appropriate for business activities that span multiple enterprises. In addition, we compare our reservation protocol with other extended transaction protocols for coordinating business activities and present performance analyses and results.