See GIF.

(Graphics Interchange Format) A popular bitmapped graphics file format developed by CompuServe. Pronounced "giff" with a hard "g" by most Mac users and "jiff" by PC users, GIFs are widely used on the Web because the format uses its own form of compression.

GIF supports 8-bit color (256 colors), but gets the most mileage out of its limited colors by using a built-in color palette. For example, the palette for an image of a forest would mostly contain shades of green and brown. If colors are within a tight range, this method provides extraordinary realism in an 8-bit image. See indexed color.

GIF87a and GIF89a
There are two GIF versions: the original GIF87a and subsequent GIF89a, both named after their year of introduction. GIF89a allows one of the colors to be made transparent (see alpha channel) and take on the background color of the underlying page or window. GIF89a also supports animated GIFs, which use multiple frames in sequence to simulate movement (see animated GIF).

GIFs and JPEGs
Both GIF and JPEG images are widely used on the Web and are supported by all Web software that displays graphics. Charts, screen shots and technical drawings with text are typically GIFs (8-bit). Images with limited colors can also be GIFs, but most photographs are generally better as JPEGs (24-bit). Sometimes, an image has to be saved in both formats to determine which is best. See JPEG.

There Was a Patent Issue

The GIF format uses the LZW compression algorithm, which was patented by Unisys, and publishers of applications that read and write GIF87a and GIF89a images were required to obtain a license and pay royalties to the company. For example, publishers of Web browsers and image editors were licensees. The Unisys patents expired in June 2003 for the U.S. and in July 2004 for Canada and Europe; however, Unisys and other companies have patents on different variants of LZW used in other GIF formats. See LZW and graphics formats.