Microsoft to give up on Passport

Internet service hurt by rivals, consumer apathy

December 31, 2004|By Joseph Menn | Joseph Menn,LOS ANGELES TIMES

Microsoft Corp. is abandoning its Passport service, one of its most controversial attempts to dominate the Internet, after rival technology companies banded together in opposition and consumers failed to embrace it.

The world's biggest software company said late Wednesday that it would stop trying to persuade Web sites to use Passport, which stores consumers' credit card and other information as they surf from place to place.

The acknowledgment came after eBay Inc. posted a notice on its site saying it would stop using Passport late next month and rely on its own service.

EBay had been the most visible supporter of Passport and was among the first companies to adopt it - with great fanfare - in 2001.

Another early backer, Monster Worldwide Inc.'s job-hunting site, Monster.com, dropped Passport in October.

Passport probably drew few new customers to Microsoft products. But it was initially seen as strategically important because it could have helped the software giant put itself in the middle of most electronic transactions.

Because it would keep track of credit card numbers and passwords as people moved from Web site to Web site, Microsoft had predicted that Passport would smooth the way for widespread use of Web services based on a person's identity, instead of those linked to information stored on a specific PC.

At one time or another, Passport attracted the ire of privacy advocates, trade regulators on two continents and technology security experts, who in 2003 found a flaw in it that could have led to widespread identity theft.

Major merchants were concerned about letting Microsoft stand between them and their customers. They feared that the company that controlled more than 90 percent of the world's desktop computers might one day charge a toll on e-commerce transactions.

In the end, Passport may have been doomed by old-fashioned competition. Soon after Microsoft unveiled it, a consortium of companies, including Sony Corp., Hewlett-Packard Co. and Sun Microsystems Inc., formed the Liberty Alliance. It issued guidelines for online customer authentication services, which encouraged the development of Passport rivals.

When eBay was a big Passport supporter, Microsoft liked to tout its use of a related Microsoft service that alerted users when they were outbid in eBay auctions.

But "a pretty small percentage of eBay users regularly signed in using Passport," eBay spokesman Hani Durzy said.

Adam Sohn, marketing director for Microsoft MSN Internet services, said the pullback was driven by Microsoft's decision to focus on building tools that other companies could use to create their own Internet programs, instead of offering the programs itself. Microsoft has been working with many competing firms to develop standards for Web services. In April, it settled bitter litigation with Sun, promising more collaboration.

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