Standing for "Portable Network Graphics", PNG was designed to be a replacement for the GIF format when patents become an issue. Unlike GIF, PNG supports two modes of operation: true-colour, and paletted. PNG does not come with support for animations, although an extension of it, MNG (Multiple Network Graphics) does support it. However, MNG is not supported in most browsers, whereas PNG is.
One of the biggest advantages to PNG is that it supports 8-bit transparency, which means a picture can have variable transparency throughout the picture, whereas GIF was limited to just having one colour or one masked area being transparent.
It is worth noting that Internet Explorer has incomplete support for PNG because it fails to support its transparency properly. Other browsers work fine.
PNG is pronounced "ping", and MNG is pronounced "ming".
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