The New York Times reports this morning that Facebook is set to expand "Facebook Connect", the controversial service that reports your activities on external sites to your Facebook profile. Facebook caused a stir a while ago when it launched this service without giving users the ability to control updates, leading to people finding out that their shopping habits were now open to their Facebook friends. While Facebook has addressed privacy issues, this move is sure to spark a wider war for ownership of on-line identity.

The NYT story notes that Facebook is facing competitive efforts from MySpace, Yahoo, and Google (surprising omitted from their list is Microsoft) who are also moving ahead with efforts to serve as an identity master repository. There's also no mention of the OpenID project, a non-commercial effort to establish a single-sign-on capability across the Internet. Facebook has an edge though, in that the Facebook ID can become not only just a single sign-on tool, but can enable users to share information about the sites they visit with their social communities. To some, this will smack of an invasion of privacy, but to many others, Facebook's efforts with Connect will allow them to broaden their social networking activities beyond Facebook and it's native applications.