The company has taken an increasing interest even though its own technology, Passport, allows its subscribers to visit various password-protected Web sites and conduct online transactions using a single identity.
Microsoft has yet to agree to make Passport work with technology developed by the Liberty Alliance. But the company has signalled that it is seriously considering adopting technology that comes from the project.
"We've had a number of conversations in the past few weeks since the new leadership took over," said Adam Sohn, from Microsoft's .Net technology group. "We've been having some really good two-way, open and frank discussions about it.
"If the alliance is really concerned about solving problems about identity on the Internet, then there's some interesting work to be done," Sohn said. "There are a few issues that we would have to work out before joining," he added.
Five more companies have recently joined the alliance in a sign of growing industry co-operation to create the common technology.
The group has created a board to co-ordinate all the various participating companies and have final approval over what specifications are adopted for creating interoperability, said Eric Dean, president of the Liberty Alliance board, and chief information officer of United Airlines.
Hewlett-Packard, France Telecom, General Motors and MasterCard International said this week that they would take part in the project and take positions on the management board. A major commercial bank, which would not identify itself, also said it would join the board.
The latest companies bring the Liberty Alliance to 18 charter members, Dean said. Some 22 additional companies have agreed to use the common technology for authentication, and hundreds more have shown interest in the project without officially joining the group, according to Sun.
Microsoft also announced its own plans to make Passport a "federated" system using a standard technology called Kerberos, so that any authentication system that also uses Kerberos will be able to interoperate with Passport.
Some Microsoft partners, including eBay and United Airlines, have said they will incorporate authentication technology developed by the Liberty Alliance into their systems as well as supporting Passport.