Lossless compression is commonly used on GIF images, but can only reduce file size to about half of its original size. Lossy compression, by contrast, eliminates some data can further decrease file size. Lossy Compression A term coined by graphics programmers to refer to a technique of shrinking file sizes by giving away some precision of detail. JPEG is an example of a file that is compressed this way. By reducing the so-called quality of a picture when you save it, you can make the file size smaller.
Many photos can take of loss of fine detail before it becomes noticeable on a web page.