There are three image file formats that are suitable for the web (suitable meaning the formats are supported by all major browsers and HTML editors):
 Regardless 
  of the image file format, you do not literally insert images into an HTML file...remember, 
  HTML is a text file, not a graphics file. Rather, you use the HTML IMG element 
  to reference those images. When the browser reads the HTML file and sees an 
  IMG element, it returns to the Internet to download the image file specified 
  by the URL. The browser then displays the image at the location of the IMG element.
Regardless 
  of the image file format, you do not literally insert images into an HTML file...remember, 
  HTML is a text file, not a graphics file. Rather, you use the HTML IMG element 
  to reference those images. When the browser reads the HTML file and sees an 
  IMG element, it returns to the Internet to download the image file specified 
  by the URL. The browser then displays the image at the location of the IMG element. 
<IMG src="URL"  alt="alternate_text" 
  align="align_value" border="pixels"> 
  
          src = URL of the .GIF, .JPG, or .PNG 
  file (required)
          alt = text to display if image doesn't 
  (required) 
          align = "left" or "center" 
  or "right" (optional)
          border = number of pixels to create 
  a border or "frame" around the image
To see how this works, let's take the example of the geek girl up and to the right -- that's it, smile! :-) . The name of the graphics file is "geeky-girl-camera.gif", stored in a sub-directory named "images". To include this image file into your HTML file, you'd specify:
<img src="IMAGES/geeky-girl-camera.gif" align="right" alt="Geek Girl Taking Your Picture">
Now, a word about the alt attribute. First, it is required by HTML! And it has several purposes, the most significant of which is that the text for the alt attribute is what displays in the browser while the image is loading, or if the image doesn't load (for example, the user can set an option to prevent downloading of images).
Second, browsers display the text from the alt attribute when you hold your cursor over an image. The alt tag is a great way to provide some additional information or assistance for images. Hold the cursor over one of the professors in the bottom right...see what happens?
Finally, the alt tag is used by machines that "read" web pages, such 
  as machines for the blind. So, you can see it is particularly important to use 
  text that reflects the nature of the graphic, particularly if it is an image 
  that is used for navigation!
   
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