By John Paczkowski, SiliconValley.com

Last updated: Wednesday, August 8, 2001, 8:30 a.m.

Mary, Mary (why ya buggin'?): Influential Morgan Stanley analyst Mary Meeker founder herself on the receiving end of another lawsuit filed by disgruntled investors Tuesday, this one alleging her analysis of AOL Time Warner was biased. The complaint charges Meeker with issuing positive recommendations on the AOL stock in order to woo AOL as a Morgan Stanley business client. The suit also claims that her ratings, recommendations and positive comments about AOL were influenced by her desire to bolster her compensation package. "Meeker's conflicts of interest remained undisclosed as she issued "inflated" ratings and recommendations for AOL," the complaint alleges. "Meeker knew that the financial condition and future business prospects of AOL did not support her positive comments and recommendations, but she nevertheless issued positive reports encouraging investors to purchase shares of AOL even in the face of legitimate contrary research entering the marketplace. Meeker knowingly issued inflated ratings for the purpose of improperly benefiting herself and Morgan Stanley." This complaint follows two federal class-action lawsuits filed against Meeker last week that claim her bullish proclamations concerning eBay and Amazon were often misleading.

Apple has quietly settled a lawsuit filed a year ago against "worker bee," a mysterious insider who leaked details of a number of the company's unannounced products - among them iBooks and the Power Mac G4 -- to various Mac sites. As part of the settlement, "worker bee" -- former Apple temp worker Juan Gutierrez-- has agreed to turn over to Apple any confidential information that he still has in his possession.

"When in doubt about our goals, we would encourage you to take the conservative view." So said Cisco CEO John Chambers during a teleconference Tuesday. Chamber's remarks followed the company's announcement of a horrific fourth quarter earnings report. Excluding restructuring charges and other special items, the technology bellwether's profit in the three-month period that ended July 28 plunged to $7 million -- a 99 percent drop from the $1.2 billion it posted a year ago. In spite of such dismal news, Chambers stood by his forecast for long-term growth ranging from 30 percent to 50 percent, which he characterized as "a stretch, but an achievable goal for Cisco." Many found such assertions hard to believe. "It's hilarious. The overall market is not improving at all, so every conference call they come out with another set of caveats on their growth projections," Sanford Bernstein analyst Paul Sagawa told TheStreet.com. "I think [Chambers] sounded a little embarrassed to bring up the 30%-to-50% thing again." Shares in the company fell 2.65 percent today in early trading.

CIA VC fund not a "total waste of taxpayers' money": The Silicon Valley venture capital fund established by the CIA two years ago apparently is doing fairly well, according to a report by the non-partisan Business Executives for National Security. In-Q-Tel, the CIA's independent, non-profit venture arm, had obtained $80.97 million in funding and has invested $38 million of that in acquiring technology. Said Howard Cox, a veteran venture capitalist at Greylock Capital and a member of the BENS panel, "I thought I was going to be the guy to come in and can the whole thing. I turned around completely on it."

Google has turned a profit.

VIA manufacturing without a license again: VIA Technologies plans to launch its Intel-compatible P4x 266 chipset in August or September despite Intel's refusal to grant it a license to build the product. Designed for use with Intel's new line of Pentium 4 processors, the P4x 266 would offer a cheaper alternative to Intel's competing Brookdale chipset, due to come to market by the end of the year. This is business as usual for VIA, which previously has had legal confrontations with Intel for making Pentium chipsets without a license.

Long-suffering content venture Salon may narrowly avoid its imminent Nasdaq delisting thanks not to revenue from its subscription-only galleries of erotic art and photography, but to a new round of financing. "We're in the final hours of completing a new round of financing that will assure not only our survival during this very tough year, but our eventual profitability," Salon founder David Talbot told The Village Voice. Salon, whose stock recently has been trading at between 18 cents to 27 cents, has had a miserable year. The company has never turned a profit, and in January it sacked about 20 percent of its staff as part of a "surgical move" to curb its operating expenses.

Let's get small: Borrowing a chemical bond or two from DNA, researchers at Purdue University have developed molecules that can locate one another and align themselves to form nanotubes. "By designing the molecules that make up the system, we have perfect control over every part of the system," Purdue's Hicham Fenniri told Small Times. "We not only dictate how the molecule behaves, but we also can control the dimensions and chemical properties of the resulting nanotube."

And I thought George Shaheen's severance package was the height of absurdity: High-speed Internet service provider Rhythms NetConnections plans to issue about $4 million in retention bonuses to its top two executives as a condition of contracts revised three days before the company filed for bankruptcy protection.

I pronounce this space devoid of technology! The folks at San Francisco's Experimental Interaction Unit have created an I-Bomb -- a device that creates "Technology Free Zones" by disrupting or disabling electronic devices with a powerful electromagnetic pulse. (Many thanks to Larry Larsen for the link)

Talk to me at jpaczkowski@knightridder.com