On Windows, which uses an antiquated method for associating files with applications, the file must have a .psd extension. Once the file is open there are a number of tools you can use to manipulate the file. If you want to use the picture in a web page, for instance, you must alter the color, layers, and channels, as well as the file extension, before the file can be used over the Internet. In both situations, the information about layers, channels, etc., needs to be discarded. This is done by converting the color mode into index color .
Small files download faster over the Internet.
If the depth and subtlety of the color are important, save the save as a .jpg. Jpeg files are naturally larger than gif files because they can hold millions of colors. GIF files, unlike JPEG, have transparent backgrounds and can be saved in an interlaced format. Transparency is the capability to set a color in a GIF file to be invisible. Interlacing means a file is not shown all at once, but instead parts of the whole are shown until all parts are shown in order to complete the full picture.