Your son may be shy but, if I were you, I would be concerned as well and would want to make an appointment with my pediatrician ASAP just so that we can rule out any medical conditions such as visual disturbance (although it may be too early to check for this) or petit mal (very small) seizure activity going on.
If your son is experiencing a social or communication delay (returning a social smile and cooing at people -- even strangers is one of the first ways that a baby learns to communicate), your pediatrician will tell you that your child is still too young to determine if the delay is something that you need to take more serious action on (early intervention), but there are steps that you can take now to make sure that he has a chance to develop those social and communication skills (some kids pick up things easily and naturally from his enviroment, others require a more concerted effort). You are probably doing a lot of these things already but just to be on the safe side, make sure that you:
-- Try to keep the t.v. off as much as possible.
-- Spend as much time as possible signing songs, playing with your son and anything you can do to draw your son's attention to you and encourage him to reciprocate with a smile or sound directed your way to really strengthen those social skills of his and keep him involved with you and the world around him. Talk to him, make funny faces, play peek-a-boo, do finger songs, share whatever play activity that he is engaged in like stacking cups or playing with a toy telephone. Be animated and kid-friendly as possible. The more that you interact with your child at this point the better.
-- Enlist as many people as possible in your inner circle (your partner, older children, close relatives, close friends, babysitter) to do the above with your child as much as possible as well. The more active socializing or structured play time your child has during the day, the better. This will help your child learn to interact easily with a variety of people, not just mom and dad.
Every child develops at his or her own rate but I would be very concerned about the "blanking out" since, although some kids outgrow certain behaviors and a child's personality does play a certain part in a child's development, this is not the case for all children. (I'm not sure if "blanking out" is necessarily a shy characteristic.) Some kids just need a more intensive, one-on-one approach to learning to socialize.
Good luck.