Whether you know it or not, if you've ever signed up for a Hotmail account, you have a Passport account, too. And that's a good thing, because if you want to access Microsoft's Web support site these days, you must enter a Passport ID and a password. So what gives? What is this thing called Passport?

Microsoft Passport is an online identification system that assigns a unique ID to individual Web surfers. Once you sign up for Passport, Microsoft provides access to a variety of its own services, including the new Windows Messenger chat program in Windows XP. And, thanks to a lot of crafty business development work from Microsoft, you can also use Passport to sign in to dozens of non-Microsoft sites, including Starbucks.com and Costco Online.

Microsoft intends to make Passport the undisputed ID system for the Internet, and its ambitious plan has consumer watchdogs, privacy advocates, and Microsoft's competitors up in arms. We'll tell you what all the controversy is about and whether you really need a Passport.

What is Passport?
Passport is Microsoft's online authentication service. Once you have a Passport account, you can use your e-mail address and password to log in to and shop a variety of Web sites and services. Many in-house Microsoft sites (such as tech support) and services (such as Windows Messenger in Windows XP) require a Passport account or will soon, along with a growing number of non-Microsoft sites, including OfficeMax.com and Victoria's Secret.

Passport is a part of Microsoft's .Net initiative, an ambitious plan to deliver software and services to businesses and consumers via the Web. Ultimately, Microsoft wants to turn Passport into the premiere authentication system for the Internet, but the company expects plenty of competition in the near future.

Passport comes in two flavors: sign-in and wallet. You need a sign-in account to use Microsoft's consumer services, including free e-mailer Hotmail, MSN Internet Access, and Windows Messenger. If you have a Hotmail or MSN account, you already have Passport: simply use your Hotmail or MSN address and password at sites that require a Passport sign-in.

The Passport wallet service lets you buy services and products online without having to reenter billing and payment information at every participating site; it's similar to Amazon.com's one-click shopping. Currently, however, only a limited number of non-Microsoft Web sites use the Passport sign-in and wallet. To date, Microsoft hasn't announced any plans to increase the number of sites.

How do I get Passport, and what am I in for?
When you create a Passport account, you're allowing Microsoft to maintain your online identity. Although that sounds vaguely Orwellian, it's really not as intrusive as you might think--especially if you skip the wallet option. To sign on at the official Passport site, for example, simply enter an e-mail address and a password. You don't have to provide your name, address, or any other personal information.

If you want both a Passport and an e-mail account, sign up for Hotmail, Microsoft's free e-mail service. You'll need to surrender a few extra personal details, here, including a sign-in name, password, zip code, e-mail address, country of residence, region or city, and a secret question and answer (in case you forget your password and need to recover it). Once your Hotmail account is active, your e-mail address and password will get you into Passport-enabled sites.

A Passport wallet account requires the most information, including purchasing information (for example, credit card numbers and billing addresses). Often referred to as e-wallets, online ID services such as the Passport wallet offer online shoppers many conveniences. For instance, you won't have to reenter billing and payment information every time you make a purchase online. Microsoft isn't the only player in the fledgling online ID market. Both VeriSign and Liberty Alliance, the latter is an industry consortium led by Sun Microsystems, are developing competing authentication systems.

Can I use Passport on my site?
As you may have heard, Microsoft has also made Passport available to Web developers, so if any Webmaster wants his or her site to have a built-in ID system, there's no need to reinvent the wheel. To put Passport on your site, you must install Passport Manager software on your Web server. For more information on how to Passport-enable your site, check out this Business Services page. One of the benefits of online authentication systems such as Passport is that they save Net businesses from the expense and hassle of creating their own ID schemes. Currently, Microsoft is waiving licensing fees for businesses, though it plans to charge a "nominal" annual fee in the future.

What is .Net, and how is Passport related to it?
Microsoft .Net is Microsoft's platform for delivering Web services to a variety of Internet-connected devices (such as handhelds and phones), regardless of programming language or operating system, including Mac, Linux, and Windows. In theory, .Net will allow different applications on different platforms to communicate and share data over the Internet. It's the foundation of Microsoft's software-as-services business model. (The Redmond company ultimately plans to charge subscription fees for the use of its applications.) Windows XP features the first batch of .Net services, including Windows Messenger, Web Publishing Wizard, and the Online Print Ordering Wizard (for purchasing paper prints of digital photos). Passport is the authentication system for .Net, so you'll need a Passport account to use future and current .Net services.

Will Passport help Microsoft monopolize the Internet?
Microsoft already dominates the PC software market, from operating systems to browsers to office suites. But it's too early to say who will control the online authentication market. Passport isn't the only player in the online ID game. Liberty Alliance, a consortium led by Sun Microsystems, General Motors, Fidelity Investments, and other industry titans, plans to launch a competing service. However, it's unclear when this service will be ready or even what its name will be. So far, Passport is the best-developed online authentication scheme. In any event, once the competing Net ID systems are available, Microsoft claims that Passport will be interoperable with them, similar to the way banks and their respective ATMs share financial information.

What's all the hoopla about Passport and security?
In the wake of two recent, well-publicized security breaches involving Hotmail and Microsoft's Internet Information Server, some analysts and privacy advocates question Microsoft's ability to ensure customer security. Microsoft is also a popular target among unscrupulous hackers, who are constantly trying to find holes in various Microsoft programs.

To be fair, Microsoft does as much as any other company to protect your data from hackers and thieves. According to the company, your information is stored on secure servers in a controlled environment, safe from hackers and physical intruders. When you log in to or buy something from a Passport-enabled site, the server sends your billing and contact information in encrypted form (using the Triple DES encryption). Still, potential Passport customers should consider these security issues before signing up--or deciding not to.

Will anyone sell my Passport information?
Security aside, privacy groups such as the Electronic Privacy Information Center are apprehensive about Microsoft's and other Passport participants' plans for your data. For example, once you start using your Passport account, will vendors track your Net activities and purchases? Will they sell your personal data to marketers? Microsoft says they won't. Passport's privacy policy lets you, the consumer, choose (during account setup) whether to grant Microsoft the right to share your data with third parties. And Passport's architecture doesn't allow Microsoft to see what you're buying online, according to Directions on Microsoft analyst Matt Rosoff. Microsoft possesses only the information you surrendered at sign-up (e-mail address, password, and so on). While Microsoft can share this information with its Passport partners--such as when you sign on to a participating site--it can't share it with other companies without your consent.

But what about Passport partner sites? Unfortunately, things get a little murky here. While Microsoft insists that its partners must have privacy policies, it does not dictate the terms of these policies. Microsoft "strongly encourages" Passport users to read its partners' privacy policies before they log in to or share information with a partner site.

What's a Kids Passport?
Microsoft offers a Passport service for pups, but it's designed to keep your children safe while they surf (rather than to get them shopping). Many Web sites customarily collect personal information from visitors, regardless of age. But according to the Children's Online Privacy Protection Act of 1998 (COPPA), commercial sites must obtain parental consent before collecting, using, or disclosing personal information on anyone under 13. Microsoft's Kids Passport service is designed to help enforce that rule.

The Kids Passport lets parents control what information their children share with Passport sites. When your child tries to sign on to or share information with a Passport site, he or she is denied access until approval is received from a parent. If you're in the same room as your child, you can walk over to the PC and enter your Passport ID and password to allow her access to, say, MSN.com. If you're at work, your child can e-mail you a request for permission to enter the site. Kids Passport is free, but you will need to provide a credit card number to set up an account. (Microsoft says it uses this information to verify your identity.)

Passport options

Can I use Passport if I don't have Windows?
Despite the Microsoft label, Passport isn't just for Windows. Whether you have a Mac, a Linux machine, or a Unix box, you can sign up for Passport as long as you have a Web browser.

Can I pass on Passport and still buy stuff on the Web?
If you'd rather not shop the Microsoft way, don't panic. You don't need Passport to shop online--well, not yet, anyway. Major retail Web sites such as Amazon.com and Kmart's BlueLight.com have their own proprietary authentication systems. For instance, once you've made a purchase at Amazon, the site stores your name, credit card number, and mailing address in its own database. As frequent Amazon shoppers know, the next time you buy the latest Harry Potter epic, your billing and payment information will appear automatically in the appropriate fields (after you enter your password, of course). And, like Amazon, Passport offers single-click shopping.

That said, however, you will need Passport to shop at many participating sites, such as Starbucks.com. Some vendors, however, including Costco Online, accept Passport but also allow you to register directly with the site without going through Passport.

Can I use Windows XP without Passport?
We've all heard rumors that Microsoft forces XP users to sign up for Passport. Well, we're happy to report that it's not true. Neither XP's product activation nor its product registration will automatically register you for the Passport service.

That doesn't mean XP is Passport-free. Some elements of the OS do require a Passport account, including Windows Messenger, the built-in upgrade to Microsoft's MSN Messenger chat program. (Of course, MSN Messenger also requires Passport, so it's not a major change.)

Do I really need Passport?
If you regularly access Microsoft content sites, such as MSN or bCentral, or if you want to use Hotmail, Windows Messenger, or even MSN Messenger, you will need a Passport account. You'll also need one if you use Microsoft software and want access to online technical support. But plenty of sites on the Web are still Passport-free.