Normally, when some big deal is announced in the business world, a rah-rah press release goes out and then smart journalists start explaining what’s really going on. In the case of BuzzFeed’s most recent funding round, however, it’s almost the other way around. The scoop was given to NYT reporter Mike Isaac, who decided to go Clever:

Here are three completely crazy insights about BuzzFeed, the viral content start-up:
1. BuzzFeed is a web traffic sensation that draws 150 million average monthly viewers.
2. Numbered lists, like this one, are what the site is most famous for and drive much of its audience.
3. BuzzFeed wants to be known for much, much more.
To help make that happen, BuzzFeed just closed a new $50 million investment from Andreessen Horowitz, a prominent venture capital firm in Silicon Valley. The investment values the company at about $850 million, according to a person with knowledge of the deal.

Where Isaac led, the rest of the world followed: even the venerable FT replaced intelligence with snark. Which means that if you want to understand what is actually going on here, you could do a lot worse than simply read the official BuzzFeed press release, which goes into a lot of surprisingly useful detail.

But before we get to what is happening, it’s worth revisiting Isaac’s lede to see what isn’t happening.

Isaac starts with a line about “completely crazy insights”, which is designed to make fun of the way in which BuzzFeed hypes its stories to drive traffic. He then talks about the enviably enormous amount of traffic that BuzzFeed has. Next he hammers home his listicle conceit, before talking about the company’s expansion plans in the vaguest possible way. Finally he mentions the actual news, throwing in an anonymously-sourced valuation number for good measure.

All of this leaves the reader with a decidedly misleading impression of what BuzzFeed is. For one thing, it does not try to trick people into reading stories by overhyping those stories. Business Insider does that, Upworthy does that — but BuzzFeed does not.

That’s partly because, its massive traffic numbers notwithstanding, BuzzFeed is not actually in the traffic business, and describing it as a “web traffic sensation” rather misses the whole point of the company. While a company like Business Insider makes money by selling inventory to advertisers, BuzzFeed doesn’t: you won’t see any ads on a BuzzFeed story page. If you feel a little bit disappointed after clicking through to a Business Insider story, at least the company has sold your visit to a client. But if you feel a little bit disappointed after clicking through to a BuzzFeed story, BuzzFeed gets no benefit at all. The people at BuzzFeed want their stories and quizzes and videos to ideally reach everybody who will love them — and no one else.

Similarly, while BuzzFeed did feature a lot of lists early on, what it’s really good at is not making lists so much as it is placing its finger on the pulse of what people really like to consume on the internet right now — and creating the products they’re going to love to consume on the internet tomorrow. Once upon a time, BuzzFeed realized that if you took a slideshow and turned it into a single page with numbered pictures, that would be an improvement. But the perfection of the listicle was just a symptom of what BuzzFeed does — as was, a few years later, the perfection of the quiz format.

Finally, there’s that much-scrutinized valuation figure. Andreessen Horowitz has put in $50 million, and now owns about 6% of the equity in BuzzFeed. If BuzzFeed were a public company, and $50 million could buy you a 6% stake, then it would be perfectly reasonable to say that the company had an $850 million valuation, and then to start comparing that $850 million valuation to the valuation of other media companies. But there’s no particular reason to believe that Andreessen Horowitz has bought itself simple common stock. If it has some kind of liquidation preference, as is quite common with VC investments, then it might well have managed to buy itself unlimited upside while almost entirely protecting its downside. (With a liquidation preference, if and when BuzzFeed ever gets sold, Andreessen Horowitz would be guaranteed some multiple of its initial investment, more or less regardless of the sale price.) Obviously, liquidation preferences are valuable things, and so it’s very dangerous to extrapolate to an overall valuation as though the liquidation preference is worthless.

So if we can’t trust the NYT on this one, what is BuzzFeed itself saying about this deal? The big message is that it wants, in founder Jonah Peretti’s words, to be “the number one digital media brand”. That means beefing up the current editorial product; investing massively in video; and an aggressive international expansion, into a number of brand-new languages and cultures. It also means that BuzzFeed is officially looking to make acquisitions of its own:

BuzzFeed’s new organizational structure allows the company to expand by incubating and acquiring new companies. Today’s reorganization is the start of an ongoing plan to grow horizontally by adding entrepreneurial new units to continue expansion beyond Motion Pictures, Distributed, Creative, and International.

BuzzFeed is an interesting type of media company. Historically, media companies have been in the business of selling individuals to advertisers: you put together some kind of a product that people love, and then bundle that product with advertising. But BuzzFeed is different. It starts the same way, by building products that people love. But then, instead of inserting advertising into that product, it then sells advertisers its expertise at building such things.

The best way to think of BuzzFeed’s various products, then, is probably as a proof of concept: it’s a way to show advertisers that the company is able to reach a large, young, mobile, social audience in a multitude of different ways. The ability to reach those people is something of a holy grail for advertisers, who are therefore very willing to pay top dollar to anybody who can help them achieve their goal. The idea is that if BuzzFeed can reach a broad audience with its various editorial products, it can then sell that secret sauce to advertisers, and help them reach the same audience, using the same tools. As Jonah Peretti told me in our Matter interview, “a great way to learn about the Internet is to build one of the biggest sites on the Internet.”

In that sense, the right comparison for BuzzFeed is probably not newspapers, or even other websites like Business Insider; rather, it’s advertising agencies, or companies like Vice, which make their money mostly by creating, rather than simply running, web-based advertising campaigns.

Looked at that way, BuzzFeed seems like it’s downright cheap at this point. Think about it this way: in 2012, Salesforce bought Buddy Media for $745 million. At the time, Buddy Media — which was basically a gussied-up way for companies to build their Facebook pages — was losing $40 million per year on sales of about $36 million per year.

It’s pretty much inconceivable that BuzzFeed is worth less today than Buddy Media was in 2012. By all rights, it should be worth many times more. BuzzFeed has much higher sales, a much more polished product, a history of successful innovation, and an all-star team of talent. The global advertising business is moving online, and BuzzFeed has a real chance of capturing a huge chunk of that business. And then on top of that it has a very interesting editorial product getting built out at the same time, which might not have much in the way of obvious revenues, but which is probably worth something.

Which means that if you’re looking at this investment and asking how anybody could pay that kind of money for a bunch of listicles, you’re looking at this investment all wrong. And/or, you’re reading articles about the deal which were written by journalists at rival, much less successful, publications. Who don’t understand that the flagship BuzzFeed editorial product is in fact the least valuable part of its business.

Felix Salmon is a senior editor at Fusion