David Berlind has a blog post entitled If ‘you’ build OpenID, will ‘they’ come? where he writes

In case you missed it last week, Microsoft is taking another swing at the idea of single sign-on technologies. Its first, Passport, failed miserably. Called Windows Live ID (following in the footsteps of everything else “Windows Live”), I guess you could call this “Son of Passport” or “Passport: The Sequel.” The question is (for Microsoft as much as anyone else), down the road, will we have “Passport The Thirteenth”?
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When I saw the announcement, the first thought that went through my mind was whether or not Microsoft’s WLID service would also “double” as an OpenID node. OpenID is another single sign-on specification that has been gaining traction in open circles (no suprise there) and the number of OpenID nodes (providers of OpenID-based authentication) is growing.
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In light of the WLID announcement from Microsoft and given the discussions that the Redmond company’s chief identity architect Kim Cameron and I have had (see After Passport, Microsoft is rethinking identity) about where Microsoft has to go to be more of an open player on the identity front, I tried to track him down to get an update on why WLID and OpenID don’t appear to be interoperable (I could be wrong on this).

Somewhere along the line, people have gotten the mistaken impression that the Windows Live ID Web Authentication SDK is about single sign-on. It isn’t. The primary reason for opening up our authentication system is to let non-Microsoft sites build and host widgets that access a user’s data stored within Windows Live or MSN services. This is spelled out in the recent blog posting about the release on the Windows Live ID team blog which is excerpted below

The benefits of incorporating Windows Live ID into your Web site include:

 

·         The ability to use Windows Live gadgets, APIs and controls to incorporate authenticated Windows Live services into your site.

For example, the recently announced collaboration between Windows Live and Bebo requires a way for Windows Live users on Bebo to authenticate themselves and utilize Windows Live services from the Bebo site. That’s what the Windows Live ID Web Authentication SDK is meant to enable.

Although the technological approaches are similar, the goal is completely different from that of OpenID which is meant to be a single sign-on system. 

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