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Cookies have come under scrutiny from data protection authorities and privacy groups around the world and have been the focus of protests against behavioural advertising.
Third-party cookies are also limited in their ability to track users across multiple fixed and mobile devices, they are irrelevant to TV and web-based video, and they are being thwarted increasingly by privacy technologies built into web browsers.
As a result, technology firms are looking for a way to track user data that avoids the pitfalls of the outdated cookie approach.
Microsoft is set to become the latest tech giant to develop its own tracking technology, according to AdAge.
The software giant is reportedly developing a technology that would enable tracking across desktop computers, Windows tablets and smartphones, the company's Xbox gaming console and services such as its Internet Explorer web browser and Bing search engine.
Google is also working on a cookie alternative, and others such as Facebook, Apple and Amazon are expected to look for ways of tracking activity on mobile devices.
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But reports indicate that, like Microsoft, they are likely to seek alternatives that will not fall foul of regulators for violating privacy rights, by using proprietary technologies that cannot be hijacked by third parties.
Microsoft's cookie replacement is expected to be a device identifier, allowing consumers to give permission for its advertising use when opting in to a device's user agreement or terms of service.
Microsoft would then become directly responsible for users' data and confine privacy concerns to the company rather than countless companies that currently collect data on people's browsing behaviour.
Replacing the cookie with proprietary technologies would consolidate power with Google, Facebook, Microsoft, Apple, Amazon and others with large opt-in audiences.
This could raise competitive issues, however, because the owners of these technologies, such as Microsoft, could see data generated by the advertisers, agencies and ad tech companies using them.
It would also make the technology owners the controllers of the gateway to advertising audiences.
It is not known when Microsoft plans to roll out its alternative to cookies, but it promises to give advertisers the ability to conduct multi-platform campaigns and analysis.