What is the best solution to implement single sign on in a .net application? I have googled and found few solutions but I am not very convinced with those solutions.
User logs on website1 and then moves to website2. How website2 will know user has logged in? I guess by passing some token in the url which will be checked by website2 in database for validity. That means I need to marshall all the urls in website1 which takes to website2?
Secondly if user continue to browse website2 for say 1 hour and then move to website1. By that time website1 session has timed out so user will see a login page, isn't it? But this behavior is wrong as per single sign on functionality.
I think you're misunderstanding how single sign-on works.
Lets consider website1 and website2 who want to use single signon.
A login website is created at identityProvider. This is the only place where a logon screen appears.
When the user visits website1 and choose to login website1 sends the user to the logon screen at identityProvider. The user logs onto identityProvider which drops its own login cookie for its domain (and perhaps allows the user to save their authentication information so they're never prompted again). It then redirects the browser back to website1 including a token in the request which website1 cracks open, gets identity information from and performs it's own login bits (dropping it's own authentication cookie which lasts for however it wants).
Then the user visits website2 and selects logon. Website2 bounces the user to identityProvider, who already knows who the user is and, if they user has chosen to save their login information, silently authenticates and then redirects back to website2 with another token which website2 cracks open and then performs its own login bits.
There's a bunch of security around it, limiting tokens to particular websites, only allowing tokens to be sent to whitelisted web sites etc. etc.
So to address your concerns