SOFTWARE COLOSSUS GRASPS INTERNET IN GIANT FINGERS.

Byline: Paul Andrews and Michele Matassa Flores The Seattle Times

It's starting to happen.

People are starting to buy, sell, barter and trade on the Internet.

Airline tickets, hotel reservations, books, cars, CDs, stocks: You can use a computer to buy them all on the World Wide Web with just a few clicks of a mouse and a charge-card number.

And when you do, chances are you will find a familiar company in an unfamiliar role: Microsoft.

A little more than a year ago, the notion that Microsoft would be running a car-buying service or a travel agency over the Internet would have been considered far-fetched, if not laughable.

A late bloomer on the Net, the software giant, whose Windows operating systems run on 80 percent to 90 percent of the world's personal computers, still was trying to find its way along the Web. There was talk that Microsoft was set in its ways, too big and too slow to ``get the Net'' and become a player in the next frontier of personal computing.

Today, all that has changed. More than 20,000 Microsoft workers worldwide, from Chairman Bill Gates on down, have embraced the Internet like a long-lost child.

``A year ago, when you said Internet, most people tended to think of Netscape,'' said Brad Chase, a longtime systems strategist for Microsoft, referring to the Silicon Valley company whose World Wide Web browser popularized Web surfing for millions. ``Today when you say Internet, most people tend to think of Microsoft as well.''

So sweeping has the transformation been, in so brief a period of time, that some fear Microsoft is gaining too much power too fast.

``Within his lifetime, Bill (Gates) will have probably acquired, by accident, a kind of power that has been rarely sought and never before achieved,'' said Jaron Lanier, the inventor of a technology called virtual reality.

``In 20 or 50 years, when most human affairs, intimate and grand, are conducted via computer operating systems, Microsoft could become the universal gatekeeper of thought,'' Lanier said in an interview published in ``Digerati,'' a book by John Brockman.

So far, Gates and his company have championed free speech - to the point of decrying the Communications Decency Act to curb pornography and posting a blue ``free-speech'' ribbon on Microsoft's Web site.

``But absolute power corrupts absolutely,'' Lanier said. ``And Microsoft could well end up with a new type of absolute power.''

Microsoft already dominates our information-based society in a way no other company can claim.

Part of it springs from the public fascination and media attention surrounding Gates, 41, the skinny Seattle nerd who has grown up to international fame eclipsing that of sports stars and entertainment celebrities and to power rivaling that of presidents and monarchs. Gates' vast wealth - $27.2 billion in Microsoft holdings alone - is cause for endless speculation and envy.

With more than $9 billion in cash, Microsoft can buy or partner its way into virtually any technology it wants. As a result, the Microsoft hand can be seen at work in just about every strategic Internet technology: news, entertainment, financial transactions, e-mail, databases and communications.

Microsoft's Internet development extends back to 1991, when it registered the ``microsoft.com'' name, giving the company an official Internet address. Microsoft kept tabs on the Net while withholding any major commitment of resources.

Starting last summer, though, the shift began at warp speed:

In August, Microsoft released an upgraded version of Internet Explorer, which has boosted the company's browser market share from a range of 4 percent to 6 percent into a range higher than 17 percent.

In September, Microsoft issued an upgrade of Windows NT - to 4.0 - accelerating its use in corporations and large enterprises.

In November, Microsoft came out with its Merchant Server, a product for shopping on the Net, and a new version of Microsoft Front Page for designing and managing home pages and Web sites.

In December, Microsoft upgraded its Microsoft Network with a TV-like look and new features.

At the Internet World conference in New York in December, Microsoft announced the acquisition of NetCarta, a Scotts Valley, Calif., maker of Web-site management products, and a strategic partnership with PointCast, a Santa Clara, Calif., Web company that pioneered ``push'' technology for broadcasting on-line information to users' computer screens without their having to surf for it.

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Chart, Photo

Chart: (Color) GETTING A BOOST FROM THE INTERNET

The Seattle Times, Knight-Ridder Tribune

Photo: (Color) John Nielson, chief of Microsoft's interactive media division, uses his on-line travel service.

Knight-Ridder Tribune Photo Service