But how exactly does Facebook’s ad business work? We still don’t know a lot about that part.

The S-1 mentions “advertising” 123 times, and “advertisers” another 117 times. But when it comes to describing how the company actually sells advertising, it is vague.

We know that some of Facebook’s ads are sold via an automated self-serve system, and some are sold via sales teams working in 30 offices around the world. And we know that Facebook uses an auction system to price some of its inventory, and that it lets advertisers target users to some degree, based on their demographics and interests.

But Facebook doesn’t break any of that out in its filing. It simply has one big bucket labeled “advertising.” There’s no discussion of click-through rates, or the size of the average ad buy, or what percentage of ad buys come from repeat customers, or how “lumpy” its sales are.

The company does mention that last year revenue increased, in part because it served up 42 percent more ads, and in part because it was able to charge an average of 18 percent more for each ad it served. But it doesn’t get any more specific than that.

Not that we should expect much more in an S-1. When Google went public eight years ago, its description of its ad business was also pretty vague (here we note that Facebook is stocked with Google expats, starting at the top, with COO Sheryl Sandberg). But by the time of the Google IPO, lots of ad folks had a decent grip on AdWords, its one key offering.

Facebook doesn’t have an AdWords, but a mix of stuff that it is playing with. It admits that this is a work in progress: “Advertising on the social web is a significant market opportunity that is still emerging and evolving. We believe that most advertisers are still learning and experimenting with the best ways to leverage Facebook to create more social and valuable ads.”

Given that Facebook generated a crazy $3.15 billion in ad revenue last year, up from $764 million two years ago, that seems to be a pretty awesome experiment. But Facebook itself seems to think things will need to change.

That’s why, for instance, it is pushing the industry to measure its ads using “gross ratings points” — the same metric buyers use for TV — instead of “traditional” Web metrics like impressions and click-through rates.

And that’s why a good chunk of the S-1 talks about the overall market for advertising — not just Web advertising, but all advertising. The message: There is a lot of money being spent on ads, and as we get even bigger, and smarter, we’ll figure out how to capture more of it.

And at some point they may share some of that knowledge with the rest of us.

MORE ON THE FACEBOOK IPO:

• Facebook’s Ad Business Is a $3 Billion Mystery
• Viral Video: Farewell to the No-IPO Mark Zuckerberg
• Zuckerberg Is the Billion-Share Man: Who Owns What, Who Makes What in the Facebook IPO
• Zuckerberg Tells Investors, “We Don’t Build Services to Make Money”
• Mobile Highlighted as Key Risk Factor (and Opportunity) in Facebook Filing
• Stop All That Poking: Facebook Filing Temporarily Crashes SEC Web Site
• Zynga Accounted for 12 Percent of Facebook’s Revenue in 2011
• Facebook Has 845 Million Users
• On Its Eighth Birthday, Facebook Files to Raise $5 Billion in Massive IPO (Get Your S-1 Here!)
• Go the F**k Back to Sleep, Silicon Valley: Facebook IPO Likely to File Later Today at Earliest
• Dude, Where’s My Facebook IPO Filing? (Ashton’s on Hold!)
• The Quiet Man: Meet the Less-Known Face of the Facebook IPO, CFO David Ebersman
• Facebook Board Meeting Today for Final IPO Okays
• Facebook (Eye)PO: Tracking the Truth of the Biggest Deal of Web 2.0
• Viral Graphic: Visualizing the Facebook IPO
• Is Facebook IPO on Track for Late May?
• IPO Watch: Facebook Hiring Brunswick to Help With Comms for Expected Public Offering
• Complete Facebook coverage

But if you watch the game on the Web, your eyeballs are worth a whole lot less. NBC, which is streaming the entire thing for the first time ever, will be lucky to get anything near a million dollars for that same ad when it runs online.

So why is Comcast’s broadcast network putting the game on the Web, period? Isn’t this the classic analog-dollars-to-digital-dimes trade that Big Media strives so hard to avoid?

Nope, says Rick Cordella, who runs digital for NBC Sports. The network assumes that nearly every eyeball — and every ad dollar — that it gets from the Web this week will be a bonus, because whoever watches online is simultaneously watching on a big TV, the way football is supposed to be watched.

This is supposed to be the classic “second screen” experience that Twitter’s Dick Costolo and so many other digital folks are excited about.

And that makes plenty of sense to me. Many TV guys have gotten plenty comfortable with the idea of streaming their most valuable live sports events online, for free. In most of those cases, the general assumption is that anyone who’s watching on the Web is someone who can’t watch the game on a TV to begin with — see the CBS/Turner Sports livestreams of the NCAA March Madness tournament.

And in NBC’s case, it is packing the Webcast full of extra camera angles and other goodies, including a feature that will let you rewatch every Super Bowl commercial once it’s aired. The assumption is that you’re holding the TV remote in one hand, and controlling your laptop with another.

NBC already does a version of this with its Sunday Night Football broadcasts during the regular season, and the network says it draws between 200,000 and 300,000 unique viewers per game (that’s the source of that Vikings-Saints screenshot, above).

Meanwhile, those broadcasts are the networks’ best-performing shows by a long shot, so it doesn’t seem to have slowed them down. The NFL, meanwhile, reports that Web companion streams of the Thursday night games it shows on its own channel averaged 450,000 uniques.

So Cordella argues that putting the biggest TV show of the year online, for free, is really no big deal. But I’m pretty sure that this attitude isn’t shared by everyone in the TV business, and we might hear a bit about that today at the D: Dive Into Media conference. Curious to see what ESPN boss John Skipper thinks, for starters.

Which is good, because here’s another one: BuzzFeed, the online publishing start-up that’s the toast of people who like to write about online publishing start-ups, is adding a tech section run by Gizmodo star Matt Buchanan.

This follows a now-familiar pattern we’ve seen from BuzzFeed CEO Jonah Peretti. Last month, Peretti brought on Politico star Ben Smith to start up the site’s political coverage and to run its overall editorial operations. A couple of weeks ago, he hired Doree Shafrir from Rolling Stone’s Web site to oversee “culture” coverage for the site.

Now Buchanan*, a five-year veteran of Gawker Media’s gadget-obsessed site, will start a new “vertical,” along with John Herrman from Popular Mechanics.

All of this hiring comes as Peretti is flush with cash courtesy of a $15 million funding round, and has reconnected with many of the people he used to work with at Huffington Post, which he co-founded.

Fellow HuffPo cofounder Ken Lerer is also a BuzzFeed co-founder, and former HuffPo ad boss Greg Coleman has come on as an advisor. Everyone who types about the media business likes writing about Peretti, but if you haven’t read any of this yet, I’d suggest starting with this New York Observer profile.

Buchanan and his crew will start publishing in mid-February, says Smith, who says the coverage will be something like what Buchanan did at Gizmodo, and also nothing like it. Think more “tech culture,” and less “stuff about gadgets.”

Well, maybe you should hold off on calling it “tech culture,” too, Smith says. “I guess I hesitate to call it tech culture, because I don’t think there’s a clear line between tech and culture anymore.”

Okay. So what’s next up in the BuzzFeed expansion plan? There’s got to be a bunch of cash left, right? “There will be more. Stay tuned.”

And now, a lightly edited version of a superfast exit interview I conducted via IM with Buchanan, who I gather is headed out for a couple of drinks as I type this.

Peter Kafka: Why’d you leave Gawker Media? I know lots of people have come to you in the past. Why go now?

Matt Buchanan: It’s an opportunity to build something completely new on a really exciting platform, which, even though the hallmark of Gizmodo is the immense freedom we all have, you know, the one thing I can never get here is the chance to do it all from scratch. And to do something that’s different from what a lot other tech sites are doing, I hope. I do love Gawker, and everybody here. I was from the generation that never got screwed over, so I only have good things to say about it.

Kafka: So should we be looking elsewhere for unboxing coverage, liveblogs of Android OS unveilings, and other blow-by-blow standards of tech coverage? Or will you leave all that behind?

Buchanan: Leaving almost all of that behind. I think technology deserves writing and criticism at the same level as any other aspect of culture, like film or music, because the reality of our world now is that it is just as important as those things. It is mainstream culture now. So we want to do tech for humans, as a main thing — but I also want hardcore tech readers to like what they see, too.

Like, we’ll talk about phones and gadgets to the extent that we find it interesting, and that other people might find it interesting, but no, this isn’t another gadget site. I would like to note that it is the first technology site powered entirely by ginger tears, which is what I’m most excited about.

Kafka: Curious about your take on your new employer. Seems to me that, while they’re uncomfortable saying this out loud, Jonah and crew are really setting out to build a new version of HuffPo: Build site by aggregating/curating, etc., other people’s content, then use that momentum/money to hire their own folks to build on that. The big obvious difference is that there isn’t a personality driving it from the get-go. And it’s tuned more to social than to search. Thoughts?

Buchanan: Yes! I think it’s too early to tell for some of that — even for me — but what I’m into is the fact that it’ll give John and I the freedom and flexibility to do the kind of tech writing and journalism that we want to do.

*Disclosure: I’ve met Matt a couple times, have chatted with him online a few more times, and I like him. He’s also an excellent resource if you’re planning a trip to Momofuku Ssäm (which you should definitely do, unless you’re a vegetarian) and need help with your ordering strategy.

That’s where SnagFilms comes in. The start-up has distribution rights to more than 3,000 indie movies, which it shoots out to platforms like Netflix and Hulu. The four-year-old company is best known for the documentaries it puts out, like “Casino Jack,” the story of the disgraced political fundraiser Jack Abramoff; others include “Super Size Me” and “Enron: The Smartest Guys in the Room.”

Now SnagFilms has raised another $7 million, following up a $10 million round from a year ago. Earlier investors like Ted Leonsis, New Enterprise Associates and Comcast have re-upped; new investors include Terry Semel, the former Warner Bros. studio and Yahoo boss.

SnagFilms started out by asking bloggers and other Web site operators to embed its films on their sites for free. It made money by selling ads against the films and sharing revenue with the movie owners.

It still does that, but it has expanded to offer free movies on other platforms, like the iPad and Android tablets. It has also started making its movies available on pay-per-view outlets like Apple, Amazon and Comcast’s video-on-demand channels. CEO Rick Allen says that by the end of the year, revenue from transactions will eclipse the company’s ad dollars.

The interesting question for SnagFilms — and a whole lot of digital video companies right now — is whether there’s a way to get consumers to identify and value what distributors do. If they do, then these guys can build lots of value, as consumers learn to trust them as a good source for small, quirky films the big guys missed.

(Image courtesy of Shutterstock/James Steidl)

“Save money and unlock rewards” based on stuff you and your friends like. Now that sounds like a pretty interesting service.

And one that makes a whole lot more sense than “You’re supposed to ‘check in’ when you go some place. And also you might get a ‘badge’ or something,” which is where Fourquare has been for most of the past three years.

Of course, during that time Foursquare has racked up plenty of gaudy growth statistics, and big piles of VC money, and seems to have fended off would-be competitors from Gowalla to Facebook to Google. So you could argue that they’ve been communicating just fine, thank you very much.

But even though everyone you know knows about Foursquare, 15 million users — and a much smaller, and undisclosed, number of active users — isn’t close to a full-on mainstream service. So this kind of messaging is important as the company tries to grow into something much bigger.

Also important: Actually delivering on the promise of the video above. The idea is that you give Foursquare lots of data about what you like and what you do, and it offers up value to you in return, in the form of suggestions, or deals, etc.

We’re starting to see glimpses of that now, but my sense is that this is still more aspirational than anything else, and that Foursquare’s management and backers agree. Foursquare CEO Dennis Crowley, in a meta post where he comments about someone else’s comment about his video, hints that there’s much more to come. Fun to watch.

Let’s take another peek, courtesy of SNL Kagan and Barclays analyst Anthony DiClemente, who has an updated list of wholesale prices by channel* (the list on the right is for ad rates, which we can ignore for the purposes of this story):

Takeaway from today’s chart: Nothing has really changed — you’re still paying a lot for sports, and you’re paying a lot for ESPN.

That’s why Disney’s sports channel is the most valuable asset on your cable dial. And it’s also why you’ve been hearing increasing grumbling — from both customers and ESPN’s non-sports cable competitors — about ESPN’s drag on your cable bill. (We’ll talk to new ESPN boss John Skipper about this topic next week at Dive Into Media.)

As I’ve noted before, the odds are that this doesn’t change anytime soon: Disney and ESPN can charge that much because the cable guys, like Comcast, think the programming is worth it to their customer base. And they’re signing up long-term deals that will keep that fee structure in place for the next decade.

But there is a chance that a “virtual” cable operator, using the Web, decides to offer a package that doesn’t include ESPN. They could either use that unspent money to lower customers’ bills, or plow it into other programming.

Again, this will also mean that subscribers couldn’t get any Disney programming, because Bob Iger has zero interest in splitting up the bundle. But I know of a few folks who have at least contemplated the idea.

So what about that “over the top” option, anyway? Some industry observers, like BTIG’s Rich Greenfield, are sure that someone — Apple, Google, Verizon, who knows — will offer one this year. Today, Bernstein’s Craig Moffett has a long essay describing why that won’t happen for a long time, if ever. Netflix CEO Reed Hastings said something similar this week, alluding to the fact that Microsoft has reportedly bailed on its Web TV subscription plans.

*The 2012 chart omits regional cable channels, which is why Fox Sports Net has disappeared in the new chart. I don’t know why the new one includes outliers like 3net, a 3-D channel that isn’t widely available (and/or relevant, as best I can tell).

[Image: ESPN]