Citigroup signs on to use .Net services

The endorsement is significant for Microsoft, which has been struggling to define a business plan for its .Net My Services concept. The idea behind .Net My Services is to establish a "digital safe-deposit box" for hosting and delivering personal information while providing an array of services ranging from commerce to communication in partnership with Web retailers.

Citigroup will use two of the .Net technologies: Passport, a password authentication service, and .Net Alerts. The Passport service will allow customers to be authenticated by Citigroup when making purchases online or accessing personal data. The Alerts service will be used to provide people with custom information online.

"Microsoft is continuing to find support for Passport and .Net Alerts. But this doesn't indicate a groundswell of support for .Net My Services," said Matt Rosoff, an analyst with Directions on Microsoft.

Microsoft had hoped consumers would pay fees that would cover the bulk of the expense to run these one-stop services, which would, in turn, manage passwords, calendars and other personal information. Instead, the plan has been the source of continual confusion among potential customers, has encountered a series of problems with its underlying technologies, and has faced internal frustration that sources say even led to its lead executive being reassigned.

Even Passport has had its setbacks: Despite Microsoft's pledge to open up the service to others, privacy organizations and consumer advocates have complained that Passport does not adequately protect consumer information, a charge Microsoft strenuously denies.

Credit card companies have been taking harder looks at online authentication, with studies showing that consumers are still concerned about online fraud. Visa recently launched a security program that validates members' identities through the use of a password.

Also as part of the deal, Microsoft has agreed to declare Citigroup's Citi Cards the "preferred payments provider" on MSN and to promote them throughout the service.

Financial terms of the deal were not released.

News.com's Mike Ricciuti contributed to this report.