Oded is now one of the ringleaders of R U Sure, an Internet comparison-shopping venture in which Yossi has invested, and like all three Vardi boys he is bright and intense. "On the down side, you have a professional issue and it's still you vs. your father," he notes, adding that, outside the family, "the expectations are very high. People expect I will open my mouth and the light will come out."

For now, at least, the elder Vardi has things under control in the oracular department. What he provides for his companies, aside from cash in exchange for a stake of 5 percent to 25 percent, is vision. Bob Rosenschein, for instance, an American who emigrated to Israel (and has made 17 trips to California this year), thought he had a clever product for doing Web-based translations. Vardi convinced him they had something much bigger on their hands, which is how GuruNet was born. Similarly, at TechImage, another Vardi-backed venture, founder Yair Winkler says Vardi's vision was crucial. "Yossi revolutionized the company in three months," he says in awe.

Everywhere Vardi goes, he bears in mind what he likes to call the "Vardi paradox," which he explains by e-mail this way: "The value of a dot-com company is in inverse relation to the per-user money invested in it, since the lower the investment per user, the higher the organic growth." ICQ represents the apotheosis of this theory, since the partners spent almost nothing on marketing.

Vardi's other investments these days range from a stake in Tucows, the venerable Internet download site, to a share in a venture bent on training 1,600 ultra-Orthodox Jews to be computer programmers. This is still Israel, remember. Says Shlomo Unger, who is running the project: "Studying Torah is good preparation for writing code."

Torah scholars writing code? "Israeli Internet scene?" Don't they mainly fight wars and grow oranges over there? Isn't the economy hobbled by a legacy of socialism? Cling to those kinds of stereotypes and Israeli Internet entrepreneurs will eat your lunch, even if it's not kosher. The Jewish state has gone hog wild, if you'll forgive the expression, for the Internet, and while Vardi may be nonpareil - very possibly on this planet, never mind just in Israel - his venture is far from an isolated phenomenon. Thanks to a remarkable confluence of factors, including a well-educated populace, immigration, an entrepreneurial business culture, strong ties with the U.S. and a military establishment obsessed with identifying and nurturing youthful brainpower, Israel is host to an exploding number of Internet startups.

As for socialism, forget it. Twenty years of restructuring have left this former economic basket-case with inflation finally under control and the public sector substantially shrunken. Kibbutzim, the collective farms that long stood as a symbol of the up-by-the-bootstraps Jewish state, are withering. For better or worse, young Israelis mainly want to make money.

The halting but seemingly inexorable peace process has helped a great deal. More important, these are a people who seem culturally destined for the Internet. Like Finland and Australia, theirs is an advanced nation far from the center of the action, but one in which English is widely spoken. The Jews, of course, are the dictionary definition of diaspora, and people in Israel often have friends and relatives abroad. Israelis have particularly strong ties with Jews in the U.S., who have traditionally been a source of capital and ideas for the Jewish state, and who come from a place where the Internet is the hottest thing since the telegraph.

Besides, technologies of all kinds thrive here: agricultural, biological, electronic - you name it. Computer companies are especially prominent. Big U.S. firms with operations here include 3Com , IBM , Motorola and National Semiconductor ; Intel has a $1 billion chip factory. But there are also important locally grown firms such as Check Point and PictureVision. An unusually high proportion of Israelis are engineers or scientists, and Israel's Technion (the country's answer to MIT) is internationally known. As Vardi puts it, "The Internet and Israel waited for each other for 2,000 years."

The wait is over. In the third quarter of 1999, the Internet leapfrogged ahead of communications and other industries to become far and away the leading recipient of Israeli venture capital. Israeli VC firms plowed $52 million into Internet startups in the third quarter, up from $17 million in the second quarter. Ten years ago, there was just one venture capital fund in Israel. There are about 50 today, and they raised an estimated $1 billion in 1999, according to Allon Reiter, an editor of the Israel Venture Association's yearbook and an investment manager with Tel Aviv-based Giza Investment Management. About two-thirds of this money is American, Reiter estimates. Most of the rest is from Europe. (Reiter notes that Israeli institutional investors have legal and psychological problems putting their shekels into venture capital funds. Thus, Israeli firms turn to VC money and, eventually, to Nasdaq. Indeed, after Canada, Israel is home to more U.S.-listed firms than any other foreign country.)