How to valuate an internet company?

Does a large user base mean a large revenue stream? Not necessarily for an internet business.
As an investor, I care more about the revenues than user base.

Facebook, the popular but financially unproven social network, which is reportedly being valued by investors at up to $15 billion.
That is nearly half the value of Yahoo, where as Y!  revenue is 32 times that of Facebook (estimated) .

Google, which recently surged past $600 a share, is now worth more than I.B.M., a company with eight times the revenue.

How are internet companies evaluated?

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