The Internet is no longer the entity analysts first thought it would be, Robert C. Pozen, president and vice chairman of Fidelity Investment and Research Company, told students Wednesday, in a speech on business and the Internet, he emphasized that businesses must look at what the Internet means for all companies.

Pozen spoke in front of approximately 50 people on Wednesday evening’s lecture, sponsored by the Lecture Fund.

“The importance of what is happening to the Internet is not in a specialized group of `dot-coms’ – what’s important is what the Internet means for all companies and all industries,” Pozen said. He also outlined how “e-commerce” and online business have shaped investments and business norms.

In his speech entitled “The Impact of E-Commerce on Investment Analysis,” Pozen posited that he could not understand why online companies could be so successful when the vast majority of the companies returned losses and no profits.

“We ask [the companies] a question like, `When do you think you’ll have some earnings?’ They usually respond, `You don’t get it,'” he said. Many portfolio managers and analysts could not understand how these companies had consistent losses yet were “proud that they had negative earnings,” Pozen added.

In his speech he also sought to debunk the theory that a new economy is prevailing today, indicating that some of the start-up Internet companies who performed well to begin with are now faced with major debt and will, according to his measurements, run out of money within a number of months. Pozen said that the new economy they spoke of, and the reason these companies claimed he and other analysts were confused with negative earnings, is the reason many are beginning to fail in the current economy.

“We as portfolio managers have been forced to become late-stay venture capitalists,” Pozen said. According to him, financial analysts like himself are now being forced to predict what a company will do and how successful it will be three to five years ahead of the time they make a recommendation or decision on the company. Many companies are issuing public stock or going public before these investors can evaluate what kind of performance the company might have.

Pozen explained how investors are now trying to deal with the changing role they play in evaluation of a company. He categorized four different types of Internet businesses: the more common business-to-consumer, the auction-like consumer-to-consumer, the consumer-to-business and the newer business-to-business models. To these classifications, Pozen related what he called a “cash burn rate,” a mathematical computation of when a company will run out of money.

“If you raise a certain amount of money in a public offering, and you lose money every month, after a while, you will run out of money,” Pozen said. “I can guarantee you that.” Businesses that run out of money must then issue more stock to raise cash. “And then you’ve got to see people like me, again, who are going to ask, `So, when are you going to make money?'” he added.

Pozen demonstrated this with some major companies like Amazon.com who had to go back to the market because they were running out of money.

Internet giant Priceline.com shut down its consumer goods Web site Wednesday because it ran out of money and could not afford the site which had allowed members to bid on gasoline and groceries and companies to accept their offers at lower prices.

According to Pozen, the reason the companies spent money so fast was because they were advertising heavily. During the fourth quarter of 1999, the “dot com” advertising spending compromised seven percent of total U.S. advertising spending, according to Pozen’s figures.

Pozen explained the way to solve the problem is to concentrate on how the Internet affects the small companies and everyone and not just the big-name companies.

After the speech Pozen held a brief question-and-answer session before the audience and then moved to the Old North building where there was a reception for the Fidelity Investment chief.

Pozen took the position of vice chairman of the firm this past June. He was at the time the President of the investment arm of Fidelity Investment and Research Company and remains the head of that division as well.