Why Is A Tech Company Worth Three Times Revenue?

Of course you can't generalize when it comes to assessing the value of a business, but there are two items of note in the title: (i) the valuation metric; a multiple of revenues and (ii), the notion that technology companies are somehow different from other companies.

Why do people speak of a multiple of revenues when they are referring to the value of a technology company? Two main reasons; first, if there are no earnings to speak of (i.e. the company is in a loss position/operating with a burn rate), then a multiple of earnings would be meaningless; and, second, what if the profit margin is at a very low level, much lower than the long term expected average? A fast growing company, operating at near break-even might technically be valued at 50 times earnings. In a case like this revenues are a much more stable metric to use.