Thus missing the point of openID.
It’s as if Yahoo are saying “Yes a one for all signup profile. Great idea, just as long as we are the one”

No matter how cool or innovative a particular new technology is, without the critical big business adoption process, it’s usually doomed. We’re in the midst of seeing this with Joost, as they can’t sign the big content deals with majo…

It’s good for Yahoo because this allows Yahoo to extend its brand beyond the constellation of Yahoo sites. Everytime a Yahoo OpenID user uses the Yahoo OpenID to logo onto otherrelying party sites, the user is reminded that “I am a Yahoo User” because the user has to type xxxxxx@yahoo.com to log in. OpenID in this case creates ’stickiness’ for Yahoo, and reduces user churn.

Based on the OpenID authentication protocol, Yahoo also gets to know what other web sites the user is using as the user is logging onto these sites using the Yahoo OpenID. So it will know, “Oh. This user has an account on LiveJournal, on Plaxo, on Magnolia, etc., etc. Let’s figure out a better way to target ads at him.” Another plus for Yahoo.

The minus to Yahoo in this case is minimal — a) initial engineering and product mgmt work to enable OpenID, b) on going maintenance, and c) additional authentication traffic in the form of additional bandwidth.

But the key to OpenId success is for Yahoo to become a relying party, or for ANYBODY with a large enough user base to become a relying party. Without relying parties, the identity problem will not be solved because the user still is stuck with multiple OpenIDs from multiple OpenID providers — it will not be any different than what it is now.

OpenID benefits to relying parties often do not out weight the negatives for becoming a relying party. Benefits include, among others, a) not having to authenticate the user because the IdP like Yahoo is authenticating him for you, b) not maintaining user passwords so no customer service calls for forgotten passwords. The issue here is that it’s not clear who is legally liable if the IdP screws up the authentication, or how the relying party is supposed to trust the IdP. It’s a big deal for large web sites like Yahoo or Google and it will take a very long time for them to feel comfortable to trust the authentication and security practices of another IdP to rely on it. Perhaps one day, they will feel comfortable to trust some IdPs, and accept logins from them, but not others. Balkanization ensues and the consumer is confused, and screwed, again.

So, I am waiting with bated breath to hear the pronouncements from Yahoo, AOL, Google (beyond blog comments) that “We accept third party OpenID login”.