It appears that both Yahoo and Microsoft are duking it out to help power the technology for India’s Unique Identification project. Spearheaded by Indian tech czar and Infosys co-chairman Nanden Nilekani, the project aims to assign every Indian citizen with a unique identification number that will identify him or her, similar to a U.S. social security number.

This is no small task considering India’s population of 1.2 billion citizens. It will involve a powerful technology to assign the numbers and a vast database to organize each unique ID. That’s where Microsoft and Yahoo come in.

Earlier this year, Microsoft chairman Bill Gates expressed a strong interest in participating in the project, meeting Nilekani and assuring him that Microsoft would be able to assign the IDs swiftly.

This week Yahoo CEO Carol Bartz lobbied India’s Prime Minister Manmohan Singh to use Yahoo for the project, but Bartz says that there’s no commercial interest in the deal and Yahoo would help power the project on a non-profit basis. Bartz added that Yahoo would be the optimal choice because Yahoo has a major presence in India. The company claims that three out of four Indians access the Internet through Yahoo.

While Yahoo is vastly popular in India thanks to sites like Yahoo Cricket that appeal to the population, its hold may be slipping. Gmail recently overtook Yahoo Mail as the most trafficked email site and Yahoo was forced to shut down its Indian social network SpotM a few months ago, as Google’s Orkut and Facebook emerge as the dominant social networks in India.

It’s unclear if Microsoft has the same “non-profit” stance as Yahoo, but obviously both companies want a piece of a highly ambitious project that could be implemented in other emerging countries. And it looks like IBM is also throwing its hat into the ring as well, so it should be interesting to see which tech giant wins out.

via TechCrunch