Microsoft's Passport fails to travel far as Web strategy

Microsoft is abandoning one of its most controversial attempts to dominate the Internet after rival companies banded together to oppose it and consumers failed to embrace it.

The Redmond software company said Wednesday it would stop trying to persuade Web sites to use its Passport service, which stores consumers' credit-card and other information as Internet users surf from place to place.

The acknowledgment came after eBay posted a notice on its site Wednesday, saying it would drop Passport in late January and rely on its own service.

eBay, Passport's most visible backer , was among the first companies to adopt it, with great fanfare, in 2001.

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

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

It would keep track of credit-card numbers and passwords as people moved from Web site to Web site.

Microsoft expected 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 hole that could have led to massive identity theft.

As for major merchants, they were concerned about letting Microsoft stand between them and their customers. They feared 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, old-fashioned competition may have doomed Passport.

Soon after Microsoft unveiled it, a consortium of companies, including Sony, Hewlett-Packard and Sun Microsystems, formed the Liberty Alliance.

It issued guidelines for online customer-authentication services, which encouraged the development of Passport rivals.

Adam Sohn, marketing director for MSN Internet services, said the Passport 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 rival firms to develop standards for Web services.

In April, it settled bitter litigation with Sun, promising more collaboration.

"Rather than have a divergent approach, it made sense to have it convergent," Sohn said.

With more than 200 million users, Passport will continue to be the method for logging on to some Microsoft-owned services, including the free Hotmail e-mail system.