So this is the guy whose oldest son was refusing to finish high school. It was especially frustrating, he says, because Arik was no dummy. The elder Vardi recalls that on every trip to America, he was under strict instructions from his son to bring back every volume that O'Reilly & Associates had published since his last visit. He regularly sacked Barnes & Noble , returning from these trips with suitcases bulging from computer texts. When he got home, Arik devoured those books.

Like his father, Arik has an entrepreneurial bent, and decided to launch an Israeli Internet service provider. Vardi thought this was a great idea and put up $50,000 to get him started. But Arik was determined to write his own ISP software. "You are crazy," Vardi recalls telling his son, but do sons listen? In a year and half, Vardi recalls, the young man had created a magnificent, fully integrated program for every aspect of ISP management. Of course, the market by then was clogged with established ISPs and Arik's planned business fizzled. After that, Yossi financed his son's fledgling T-shirt business. This didn't go very far either.

Arik wasn't done yet. This time he and friends Yair Goldfinger and Sefi Vigiser had a new scheme: a kind of Internet messaging system. At this point many fathers, wallets lightened and patience thinned, would be throwing around words like "bum." Instead, Vardi listened respectfully and invested $50,000 to get the young men going. When that ran out, he put up another $25,000.

More important, he got involved. The father of three headstrong young men, Vardi knew a thing or two about handling his young partners, and he had plenty of experience in business. What he didn't know much about was the Internet, although he'd been involved in an earlier venture that sold airline tickets online.

As Vardi became immersed in the Web, he became obsessed with two issues: user experience and viral marketing. "What makes a product a cult?" he asked himself again and again. An avowed Internet anthropologist, Vardi found that, like every other society, the Web is stratified. Leaders look for something absorbing and have an impact far beyond their small numbers. Active followers come next, he says, followed by passive followers. Thus, Vardi says, ICQ and its Web site, famous for their Byzantine looks and rich load of features, are intentionally complex. Their creators were catering to the youthful Internet fiends who loved playing with it. ICQ was designed to give them plenty to discover - and to describe to one another.

Which is where viral marketing comes in. By its nature, ICQ is a kind of giant pyramid scheme (the name stands for "I seek you"). Users try it, like it and then have a big incentive to tell their friends so they'll have somebody to talk to online. Pretty soon the numbers start to add up. The first version of ICQ was released in November 1996, and by the following May it had a million users. By December 1997, the figure was 5 million. By June 1998, it hit 12 million.

"What I'm selling," Vardi realized, "is the economic value of a social phenomenon."

He made elaborate studies on the nature of a "session," and likes to explain that each requires three "handshakes" and five "virtues." The handshakes are just advance agreements on location, media and agenda. The virtues are availability, assembly mechanism (such as an invitation), admission policy, means of alert and response. All of this was carefully built into ICQ. As it developed, Vardi saw that people didn't just use this software; they loved it. Adoring e-mail poured in. Topic-oriented ICQ discussion groups sprang up.

"Since the dawn of history, people have confused the message with the messenger," says Vardi. "People love ICQ because it's the delivery mechanism for something very important to their lives."