In the jammed, cacophonous eatery, he cuts an imposing figure. What's left of his wiry, gray hair is askew, and the collar of his shirt isn't merely open, it's prostrate, as if in defeat. His baggy gray pants, meanwhile, seem bent on affirming Newton's findings about gravity, and so every now and then their owner, like some paunchy Sisyphus, hauls them back up over his swelling stomach, where they can begin their slide anew.

He looks like someone who should spend the next three years on a treadmill, but from the menu he orders what he describes as "leg soup," a Yemeni specialty consisting of a giant crescent of organized fat in a moat of rich, brown broth. It is the stuff of cardiologists' nightmares, but Vardi's eyebrows levitate happily after his first taste. This is a man who goes with his gut, and he takes good care of this most precious asset.

But we are not here with Yossi Vardi just because of the food, renowned though it may be in Jerusalem. There is a grander purpose to this expedition. It's part of an effort to find out how a nation as tiny as Israel, with only 6 million people, could make itself into such a hothouse of flourishing Internet startups. Vardi is a man uniquely positioned to provide some answers.

As it turns out, the answers aren't just about business, because the Internet raises some giant questions in a place like this, questions that have nothing to do with bandwidth and balance sheets. What impact, for example, might a phenomenon like the Internet have on a place like Israel, given its unique historical role as a Jewish state - a role that has helped make it such fertile ground for the Internet in the first place? Israel is changing the Internet, but will the Internet change Israel? And can a Jewish state, once wired, remain a Jewish state?

Vardi is a good place to start. A secular Jew, his attachment to Israel nevertheless is so strong that he rejects opportunities if they mean he'd have to move to America. On the contrary, he's living proof that someone 20 hours by air from Silicon Valley can build an Internet business and sell it for a fortune in less than two years, even though there were no sales, no profit, no marketing and no formal management team.

Under Vardi's fatherly guidance, that's exactly what happened. His oldest son and two friends created ICQ, a program that quickly became an Internet sensation, with some 50 million registered users worldwide. ICQ lets them know when others are online and allows instant messaging between them, as well as live chat and conferences. It's become such a phenomenon that low ICQ numbers, which carry considerable cachet nowadays because they denote ICQ's first users, are sometimes auctioned on eBay . In 1998, America Online agreed to pay $407 million for ICQ. Other Internet startups scoff at profits, but Mirabilis (the apt name for the company that created ICQ) wouldn't even sully itself with revenue, grossing only $30,000 in its entire life. "Revenue is a distraction," Vardi says with the slightest hint of a smile.

Pay attention to the slyness of this expression. Do not be the arrogant murderer who patronizes the rumpled detective in all those Columbo reruns. Do not be fooled by the belly and the leg soup and the avuncular demeanor. Vardi is a nice guy, sure. But he's also shrewd, tough and learned, a profoundly well-connected member of Israel's ruling elite who is also a passionate student of human psychology and, lately, a philosopher of the Internet. Thanks to his killing on Mirabilis, he's become the unofficial godfather of the Israeli Internet scene, sitting in his Tel Aviv home office while a parade of Mirabilis wannabes troop through, desperately trying to entice him to invest, offer a blessing, lend even his name. Despite their frantic yoo-hooings, Vardi will pass most of them by.

Yet he's hardly sitting on his hands. Instead he's backing a number of new Israeli Internet firms, and given his track record both on and off the Internet, these are probably companies to watch. Amazon.com 's Jeff Bezos, after all, has called him an "Internet visionary," and Jonathan Medved, a venture capitalist in Jerusalem who has invested both with and against Vardi, says that "he's almost a mythic figure in this country today."

To his children, of course, no man is mythic. Oded Vardi, Yossi's middle son, says that being a Vardi these days has the obvious advantages: entree to the industry, a chance to learn from a master and, of course, the challenge of a childhood with Yossi.