Yahoo (NSDQ: YHOO) has decided to support for OpenID, the decentralized identity system that allows users to sign into multiple sites with a single identifier. Starting with a beta launch at the end of the month, Yahoo users will be able to sign onto OpenID-enabled sites in one of two ways, depending on how the site has it set up: either users can login directly using their Yahoo account credentials, or they will be able to enter http://www.yahoo.com or http://www.flickr.com and get taken to a Yahoo page to enter in their info. Among the sites that will be allowing direct login with Yahoo credentials is Plaxo, which fits with its position as a network-neutral social utility.

With the announcement, Yahoo joins a number of other companies, including Digg, AOL (NYSE: TWX) and Six Apart, which have announced support for the platform in some way or another. Still, the challenge is to get more sites to actually accept an OpenID login as a substitute for traditional registration. It’s good for OpenID that these big sites let their accounts be used as identifiers, but if you look at lists of sites that actually let a user log in with an OpenID, it’s still quite spare. Release.

Scott Kvetton, board chair of the OpenID Foundation, discusses the significance of the announcement at Yahoo’s Yodel Anecdotal.