I have always heard that it depends on what type of company you are. Service based companies will trade at less than 1x yearly revenue. An example of this is

I have always heard that it depends on what type of company you are. Service based companies will trade at less than 1x yearly revenue. An example of this is if you were to sell a consulting business. Product based companies will trade somewhere at 2-10x annual revenue. This is like a toy company. Product based service companies like Netflix seem to trade at 10x plus depending on the stickyness of your service and how much lock in you have. Netflix offers monthly subscriptions, where your site is based purely on advertising which may have better adoption rates, but lower buy in rates. The lack of customer buy in is a huge problem with many web2 ad supported business models. Salesforce.com has amazing buy in, it changes your company culture when you start using the software, plus you pay yearly for it.