It's one of those perfect autumn nights that make Manhattan seem magical. There is not a cloud in the sky, and looking up from the streets, you can see stars. On the avenues, white lights speckle the trees. There is a chill in the air—just enough to ice the occasional breath—and the urgent roar of the city is a reminder that New York at this moment may be the Rome of the modern world. The NASDAQ is at a record high. Again. New companies are being born. It is a perfect night for a launch party. [an error occurred while processing this directive]

This year it has always been a perfect night for a launch party. This year it's as if "ideagetthemoneyhireaCEOlaunchpartyIPO" has become one big, fast millennial screech. Companies that barely existed a year ago are publicly traded, their founders ungodly wealthy. Some argue the world has entered a long boom, a kind of economic speed loop, where the centrifugal force spins off nothing but wealth and happiness. And launch parties. So up and off an elevator you go, melting into an unimaginably beautiful crowd. Every woman looks like a model; every man looks, well, Italian. This is an Internet party, right? What on earth could they be selling? A sign on the wall reminds you: this is the launch party for Beauty.com.

And it is a lovely site: cosmetics tips, fragrance guides, a look at the latest European lip glosses. "Oh, come on," you're probably saying, "who is going to buy cosmetics online? If there is one thing no one will buy online, it's cosmetics. You've got to see how it looks, after all." But wait a minute. Didn't you say the same thing about books? "Who would buy books online? You have to be able to flip through the pages." And wasn't it you who said, "I'd never buy plane tickets online. I can't imagine not talking to my travel agent!" And mortgages? And toys? Concert tickets and CDs? "But I'd never," you said. Yes, you will. You are.

This year you'll buy about $15 billion worth of consumer goods online. Businesses will spend an additional $109 billion buying from one another. And while those numbers are but a small part of the overall retail economy—which clocks in at $2.7 trillion—e-business is rapidly replacing the traditional kind for almost any purchase you can imagine. By the time the ribbons are off the packages this week, Americans will have spent $5 billion online for holiday gifts—more than twice as much as last year.

It's easy to sit here today nodding about the power of electrified commerce. But back in the day when you—frankly, when everyone—was pooh-poohing the idea of online sales, there were a few folks who believed. One of them, on a summer day in 1994, quit his lucrative job at a New York City investment firm, packed up and, with his wife driving, made a now legendary voyage to Seattle to start what he thought would be a good business. By the time he arrived there he had a plan to sell books over the Internet. Investors thought he was crazy.

Every time a seismic shift takes place in our economy, there are people who feel the vibrations long before the rest of us do, vibrations so strong they demand action—action that can seem rash, even stupid. Ferry owner Cornelius Vanderbilt jumped ship when he saw the railroads coming. Thomas Watson Jr., overwhelmed by his sense that computers would be everywhere even when they were nowhere, bet his father's office-machine company on it: IBM.

Jeffrey Preston Bezos had that same experience when he first peered into the maze of connected computers called the World Wide Web and realized that the future of retailing was glowing back at him. It's not that nobody else noticed—eBay's Pierre Omidyar also knew he was on to something. But Bezos' vision of the online retailing universe was so complete, his Amazon.com site so elegant and appealing, that it became from Day One the point of reference for anyone who had anything to sell online. And that, it turns out, is everyone.

There was a time when Bezos could say, "If I had a nickel for every time a potential investor told me this wouldn't work..." and then lapse off into head shaking. Now he follows that line with a wild, giggly laugh. No wonder: as of last week, Bezos had 200 billion nickels. A rich reward, to be sure, but how on earth can you compensate a man who can see the future? Perhaps by inaugurating him into that club of men and women selected for having had, "for better or worse," the biggest impact in a given year. Welcome, Jeff Bezos, to TIME's Person of the Year club. As befits a new-era entrepreneur, at 35 you are the fourth youngest individual ever, preceded by 25-year-old Charles Lindbergh in 1927; Queen Elizabeth II, who made the list in 1952 at age 26; and Martin Luther King Jr., who was 34 when he was selected in 1963. A pioneer, royalty and a revolutionary—noble company for the man who is, unquestionably, king of cybercommerce.

As far as names go, Amazon is a perfect choice. (Not least because its ticker symbol, AMZN, is a license-plate version of how the stock has performed.) The wild Amazon River, with its limitless branches, remains an ideal metaphor for a company that now sells everything from power tools to CDs, and is eagerly looking for new areas of expansion. It's possible to argue that Bezos didn't master much more than an evolution of commerce, replacing old-fashioned stores with a centralized sales and shipping center. But even that one change, he notes, grabbing a favorite word, is "huge." For old-line businesses like K Mart, getting new customers meant building new stores at a cost of millions. For Bezos, serving new customers costs next to nothing.

And he is still losing his pants. That's maybe the one thing people still really don't understand about the e-commerce revolution. If these are such hot businesses, then why are they hemorrhaging cash? Amazon—the company everyone wants to be like—could lose nearly $350 million this year. O.K., the Net is different, but don't profits and losses matter anymore? They do. Bezos insists Amazon's oldest businesses—books, music and video—will be profitable by the end of 2000.

But Amazon's losses are also a sign of the New Economics of Internet commerce. These new rules spring from the idea that in the new global marketplace whoever has the most information wins. While it used to be sellers who had all the information, buyers are getting smarter and smarter. At sites like mysimon.com, it's possible to go shopping and search not only Amazon but also the collections of two dozen other booksellers to find the best deal. And in coming years—heck, at Net speed, in coming months—it will be possible to find the cheapest price on just about anything: wines, CDs, perhaps even body parts.

No venture captures these new infonomics better than eBay, the four-year-old auction site. The eBay miracle isn't that it allows you to clean out your attic at a profit—though that's not a bad invention—but that it changes the whole way that we set prices. On eBay, buyers get to decide what something is worth, so objects migrate closer to their true value. Recently a Maine antiques store put an old-fashioned calculator up for sale on eBay for $100. Within a few days the calculator-loving collectors of the Web had bid the price up to $6,500. The antiques sellers had had no idea that they were sitting on a gem. But the Web's information-driven economics helped find the right price.

Applied to the world of calculators, that's something of a curiosity. But applied to everyday retail, it's a revolution. The idea of fixed prices is only about 100 years old. Before then nearly everything was negotiable. The last great retail revolution was mail order, led by Sears, Roebuck in the 1890s, and it solidified the idea of fixed prices, since buyer and seller were often separated by hundreds of miles of rail track. In the Internet age even buyers and sellers separated by 10,000 miles of fiber-optic cable are closer than those prairie purchasers were to Mr. Sears. They are nanoseconds away, and, as is becoming increasingly apparent, speed kills. It kills old economics, it kills old companies and it kills old rules.

Bezos is struggling mightily to make sure it doesn't kill Amazon too. Even as he cuts off competition like eBay by getting into the auction business himself (partnering with no less than Sotheby's), he is also trying to make Amazon a model of i-age shopping. When we buy one book, Amazon's computers can tell us what other people who bought that book purchased (and what they thought of those purchases). Or the site's users can look up the most popular books at their company or in their hometown. A few clicks from Amazon's home page will reveal, rather worryingly, that the three most frequent Amazon purchases in Los Alamos, N.M., are the biography of an East German spymaster, a book about the black market for nuclear materials and a history of Soviet espionage.

There is, in all this, a kind of humanness that is exactly the opposite of what online shopping was supposed to be like. Amazon is not a depopulated, Logan's Run kind of store. The site allows readers to post their opinions about books, to rate products, to swap anecdotes. As you sit there reading, say, a literate and charming book review from Bangladesh, the real power of the Amazon brand comes home. It is a site that is alive with uncounted species of insight, innovation and intellect. No one predicted that electronic shopping could possibly feel this alive. If it is a sign of an e-world yet to come, a place in which technology allows all of us to shop, communicate and live closer together, then Jeff Bezos has done more than construct an online mall. He's helped build the foundation of our future.

COVERS GALLERY: Click here to see the cover image from 1999

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