October 24, 2000
Part of a new niche of "portable identity" services, Catavault's one-password access to the Net could aid e-tailers as well as customers

The idea for Jonathan Bari's Web startup didn't come to him during a relaxed moment in the shower or over a few beers with friends. It was early 1999, and in a chaotic airport he tried to go online to reschedule yet another canceled flight. In his hurry to log in, Bari just couldn't get his password right. All he got was an "invalid login" message.

Frustrated, Bari reached into his wallet and pulled out the yellow sticky note on which he had scribbled passwords and personal-identification numbers for everything from his online-brokerage account to his frequent-flier program. "How secure is this?" he thought. "There had to be another way."

Bari found one and started Catavault. The Philadelphia company offers a free online service that provides one-password access to the Internet. An electronic version of Bari's yellow Post-it Note, Catavault stores a person's user name and multiple passwords, then launches them -- hence, the name Catavault -- to the person's choice of more than 2,000 Web sites ranging from Amazon.com to online toy store ZanyBrainy.com.

FIFTEEN A DAY. Catavault also stores personal-demographic information (which it claims it won't sell) and automatically registers users at sites they choose, saving them from having to fill out the same information every time they sign up for a new Web site. "It's an easy-to-use service that lets you log on to different Web sites, anywhere, anytime," says Bari, Catavault's 33-year-old CEO.

How many passwords do people use in a day? Bari says the typical Web surfer might use as many as 15 -- a lot for people to remember. But at Catavault, users simply type in a master password to create their own personal "vault." There, they can store passwords and PINs for an unlimited number of sites. The Web sites the customer selects to store passwords for appear in a tidy list, and with one click, users can jump to the site, bypassing the demand for a password.

The startup, which went live in August, is part of a new niche of Web services called "portable identity" providers. Most offer one of four services: easy password access to the Internet; e-wallets that store financial information for online payment; summaries of personal data such as frequent-flier miles or bank statements; and software to help users fill out forms on Web sites. Some -- namely information aggregators such as Gator.com and Yodlee.com -- combine two or more of those capabilities.

NEEDING A PARTNER. Catavault combines password access and online registration. But Bari wants the service to become the user's homepage or Web portal. Users can create special vault categories called "My Life" to store additional personal information, including numbers for their bank accounts, driver's license, and health-insurance policies. Why would anyone do this? Convenience, says Bari, who claims one-third of Catavault customers, who number in the tens of thousands, store information in this way.

Storing all that data, Bari believes, will pay off. He has agreements with e-commerce sites, which are linked to Catavault's site and must hand over a small percentage of a sale if a buyer logs on through the link. He is also selling ads on the company's Web site and licensing its password-storage technology to other sites so they can provide easy entry to users who come directly to them. Bari won't discuss revenue, but he expects the company to turn a profit next year.

As the Web grows more complex and attracts more mainstream users, analysts see growth opportunities for portable-identity services such as Catavault. "The consolidation of password capability will be used by a majority of consumers over time on the Internet," says James Van Dyke, an analyst with Jupiter Research. But he notes that such startups have yet to win the trust of a majority of users and they may have to find a partner, such as a financial institution, in order to do so.

SMOOTHER ENTRY. Putting an end to password and registration snafus would benefit e-tailers as well as online consumers. Bari claims that initial sign-on problems cost e-businesses $30 billion a year in lost sales and administrative costs. Although market researcher Jupiter doesn't track how many online customers click away when faced with tedious sign-on procedures, analyst Peter Marino says it's particularly important for new sites to feature easy and speedy log-in and to offer it to first-time visitors. Bari believes smoother entry would translate into more visits and fewer abandoned shopping carts.

E-tailers that have partnered with Catavault say it's too early to be able to measure benefits. But Jack Kiefer, owner and CEO of Babyage.com, is convinced that Catavault will boost his company's revenues. Prompted by reports from his customer-service representatives of people repeatedly calling to say they had forgotten their password, Kiefer tried the service himself for two weeks before becoming a Catavault partner. "We've had callers use it and inquire about it, and they think it's a great asset," he says.

But what happens if a user forgets the Catavault password? "It certainly can happen," Bari says. Users won't have to rely on sticky notes: The site has a reminder service to help jog their memory.

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