The Last Temptation at CBS

Millionaires-R-Us? Not quite. An online journalist jumps ship to go for the real money.
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SAN FRANCISCO -- Darren Chervitz looks, appropriately enough, like a young reporter. He's gangly, somewhere south of 6 feet tall and somewhere short of disheveled. He enters a room with a slight stoop and pleasant, inquisitive smile. Chervitz is 25 and, as such, sports one of those short, spiky haircuts as well as a sinewy build more young than athletic. (On the ballfield at his St. Louis high school, they called him the Piano Man because he ran with the speed of a man lugging a Steinway.)

Though sharper than most, he's only the slightest bit cocky. One part

Doogie Howser

, another part


, when conducting an interview he doesn't so much badger his sources as linger around until they say something interesting: "Well, I dunno, doncha think..."

In short, he has all the appearance of a guy who might grow into a great reporter, but Tuesday, Chervitz ended that career by resigning from



. Writing about IPOs, including his weekly column called IPOnder ("a play on IPO that nobody really got," he says), was the only job Chervitz has had since his 1996 graduation from

Northwestern University

. But just a few weeks short of his three-year anniversary with the company and just two days before the lockup expired on his employee shares, he walked into


basement newsroom and informed his boss that he would be joining

Ryan Jacob's

new Internet fund as a senior financial analyst.

A few hours later, a friend of Chervitz's, another journalist, stopped me on the street to share this information, saying, "You heard about Darren? He went over to the dark side."

In journalism, as in

Star Wars

, some feel the pull of the dark side of the Force more than others. To go from news flunky to news item is rare on most beats. As a sportswriter, I never imagined that I could strike out

Ken Griffey Jr.

But when covering finance, joining the game can be a temptation. Journalists talk in almost whispered tones about those who have crossed over:

The Wall Street Journal's

David Hilder left for

Morgan Stanley Dean Witter



The New York Times'

Steven Rattner became deputy chairman of

Lazard Freres



correspondent Mike Moritz became the star partner at the powerful Silicon Valley venture capital firm

Sequoia Capital

. Their names are spoken with an uncomfortable mixture of envy and disdain. After all, journalists are supposed to maintain a healthy distance from those they cover, no matter the beat. Sycophants can't do this job.

"There's the temptation of power in Washington, but it's the temptation of money that affects the financial journalist," says Marshall Loeb, the editor of the

Columbia Journalism Review

. Loeb spent almost five decades at






(and will soon pen a column for


). He has seen this all before. "I love journalism very, very much. Still, I say, if somebody does leave, that's not so awful. I find nothing wrong or nefarious with someone who wants to practice what they write about."

Indeed, Chervitz exudes a passion when talking about companies. "


was awesome and my editor taught me a lot," says Chevitz. "But some aspects of real-time online journalism can be frustrating. It's hard to write thorough, insightful analysis on deadline. There's something frustrating about having to call 20 analysts to get one quote in order for a story to run."

When we would be sitting next to each other in the press room at an investment conference, I remember Chervitz's amazement that I would put colorful commentary in my

stories. "No


your editors print that," he'd say. (My brilliant editors, of course, did.)

"We all have a desire to make our opinions known," he says. "But


wasn't a place where I could do that. All journalists deep down really think that they are analysts and know something about the industry." Now Chervitz has a chance to prove that.

In journalism, as in

Star Wars

, some feel the pull of the dark side of the Force more than others. To go from news flunky to news item is rare on most beats. As a sportswriter, I never imagined that I could strike out Ken Griffey Jr. But when covering finance, joining the game can be a temptation.

Chervitz's resignation was not warmly received. "I was furious and I was disappointed," says

Editor-in-Chief Thom Calandra. "I told him he was making a big mistake. At least it's the buy-side, so it's the lighter side of the dark side," he says. "At least he's working on behalf of investors. But I think that time will prove that he's made the wrong choice." Chervitz's phone extension was disconnected just hours after he gave notice, and his name was yanked off the masthead the next morning.

Chervitz quoted Ryan Jacob 65 times in the past two years, but that's not why he got the Internet fund job. Jacob, 29, says he hired Chervitz because two years of writing about Internet IPOs give Chervitz a history in this business that few others possess. "I know that's not a terribly long time, but it is on the Internet," says Jacob. "Any portfolio manager will put management right on top of their list of important factors -- and it's extremely important in the fast-moving world of the Internet. Darren has had valuable exposure to management. He knows who seems like a used-car salesman and who doesn't. And more importantly, he has a real passion about this."

Another uncomfortable subject, of course, is the money. Chervitz isn't doing this for charity or the greater good of humanity. He's going to make significantly more money in finance than in journalism. While Chervitz was one of the longest-standing of the 65 employees at


, one of the first five editorial hires, he was only vested in one-third of his stock options. By his account, it didn't add up to much. "What percentage of the company do I own? For numbers like this, that's why they invented basis points," he says. "It was tiny. Don't get me wrong, it was a nice bonus, but it wasn't going to change my lifestyle."

Despite the stories of online riches, despite the line in London's

Evening Standard

last week that "some journalists are making bigger fortunes than investment bankers; they just look like losers," the fact is that the millions have been doled out to few.

Calandra says the salary for an entry-level reporter at

is between $30,000 and $40,000, and Chervitz could make two or three times that in finance. It's easy for Calandra to say Chervitz is making the wrong move, but according to

Securities and Exchange Commission

filings, Calandra has 75,000 shares of MarketWatch at $4 each -- a windfall of some $3,525,000. Meanwhile Chervitz's colleagues within

say he was vested in about 1,000 options priced at $4 -- at today's prices, that's about $47,000.

Chervitz won't say what his remuneration was, but it's clear that he wasn't on his way to owning a mansion and a yacht. "I saw all those stories about journalists becoming millionaires, but it's really a different ball game," says Chervitz. "As is true in most companies, the top people do the best, and as you get further down the rung, the other people did a lot better. I was on a pretty low rung."

Despite his cousin Gary Belsky's being a longtime writer for


magazine and a current writer for

ESPN The Magazine

, journalism isn't in Chervitz's blood. "It's never been a deep passion for me," he says. "Basically, this is going to be a purely intellectual job: I won't miss the deadlines."

He'll have new pressures, of course. Like what to say to Jacob when one of his picks goes the wrong way. After all, journalists without opinions neither profit nor perish from reporting the news. Stock-pickers who goof eventually lose their jobs. Onetime


reporter Arieh Coll knows that too well.


removed him as fund manager after two miserable years that saw Fido's

(FTRNX) - Get Report

Trend fund lose 12.7% under Coll's management, while the rest of the market was up 24.8%, according to



And it's safe to say that, although Chervitz was across the aisle as a competitor of

, he will be missed in the pressrooms.

As originally published, this story contained an error. Please see

Corrections and Clarifications.