With the boom in social networking, many web sites have started offering new tools for building or expanding your initial network of contacts.
For instance, sites like Facebook or Linkedin provide a tool to get your Windows Live contacts and use them to more easily find or invite those people into your social networks.
Although the idea is very good, the current implementation contains some serious security issues from my point of view. The user has to enter in some way his Windows LiveID credentials into those sites (using a custom http form), so they can log into Windows Live and get the user's contacts.
There is not any particular difference between this approach and a phising web site created by a malicious user only with the intention of getting your personal information.
Not all people (including me) trust these sites enough to provide them with valuable Windows LiveID credentials. These sites are very well-known, but we are not certainly sure which will be the final user of our credentials. (or even, if they are keeping them somewhere).
This security issue could be basically solved if Windows Live provided two fundamental things:
1. Http REST Services to get the user contacts or other personal information.
2. An authentication mechanism for those services based on security tokens. Something similar to what OAuth provides, so the user will never have to enter his credentials in a site different from Microsoft again. Another advantage of this protocol is that the user will finally decide whether he authorize third party sites to get his personal information or not. If you are curious about how OAuth works behind scene, an excellent "Begginer's guide" is available here.
Fortunately, the Windows Live team has made an excellent progress in these two aspects. One one hand, they have developed an "Windows Live ID Delegated Authentication SDK" to integrate Application providers through a protocol pretty similar to OAuth (I haven't had enough time yet to take a more detailed look at this SDK)
From the MSDN site,
"Delegated Authentication is based on a block of information, called a consent token, that is provided to your Web site by the Windows Live ID service for a given resource provider (such as contacts and photos). To obtain a consent token for use at a particular resource provider, you must first request it from the user by means of the Windows Live ID consent service. Your application must then manage the authentication data that is returned. For detailed information about how to request and manage consent, see the Windows Live Delegated Authentication SDK."
On other hand, as part of "Windows Live User Data APIs", they have started providing REST services to allow Windows Live users to safely and securely share their information stored in Windows Live services. One of this services is what they have called "Windows Live Contacts API", a REST service that enables developers to programmatically submit queries to, and retrieve results from, the Windows Live Contacts Address Book database service.
Hopefully, it will be a matter of time until Facebook or Linkedin start integrating services like these into their sites for the benefit of all :).