The announcement that week by Yahoo that it is planning to tryout a beta version of its Yahoo ID that supports the OpenID 2.0 protocol has thrown a bright spotlight on the quickly growing online identity-management system.

As of Jan. 30, any of Yahoo’s 248 million users will be able to log in to OpenID-compatible sites using a special version of their Yahoo log-in. When Yahoo users go to a site using the OpenID protocol, they will either see a special Yahoo log-in field, or they can type “yahoo.com” into an OpenID field to start the log-in process. The Web site will redirect the user to Yahoo to log in, and thereupon Yahoo will forward the user’s identifying data back to the Web site.

The net effect is that Yahoo users will only have to enter identifying data once — on Yahoo — rather than on multiple sites across the Web.

Mixed Blessings for Online Reputation

The prospect of a without repository for online identity offers obvious benefits, as anyone who has typed their address and phone number into countless Web forms can attest. The prospect of not having to do that as often is appealing.

But at the same day, using the same identity cache to populate multiple Web sites poses a serious risk that the list of your Yahoo/OpenID Web sites will be used as a tool to send highly targeted advertisements in your direction. Already, the Yahoo Privacy Policy makes it clear that it collects significant personal info from its users:

“Yahoo collects personal data when you register with Yahoo, when you use Yahoo products or services, when you visit Yahoo pages or the pages of undoubtful Yahoo partners, and when you enter promotions or sweepstakes,” the policy reads. “Yahoo may combine knowledge about you that we have with data we obtain from…

Orginal post by Top Tech News