WebP is a new lossy image file format from Google with an annoying 4 character extension! It won't be the first new image format, the last successful one was PNG. There was also JPG 2000 but after the GIF submarine patent issue in 1995 the worry about possible patents has effectively killed it. Microsoft mentioned JPEG XR a year or two back but it's now got to be a non-runner I guess.
WebP is different as it comes from Google and they have open sourced it and made it completely free to use unless you try to sue Google. They tested the format by re-encoding 1,000,000 existing web images, mostly JPEGs, GIFs, and PNGs, and got a 39 per cent reduction in average file size.
JPG is such a ubiquitous format that it will take I guess maybe 5 years for it to be replaced by WebP. There's a gallery page showing side by side comparisons. Sadly there's no comparison of Lena Soderberg as it's a copyrighted image and the full image is NSFW! This was a famous 1972 Playboy image that is claimed to be the most often used in testing image algorithms.
WebP is so new (announced a few hours ago) that it will take a few months for WebP support to get into browsers, with Chrome most likely first and then possibly Firefox. WebP is bitstream-compatible with VP8 (the Google Video Format) and uses 14 bits for width and height meaning that the maximum file dimensions for WebP are 16,383 x 16,383 pixels.
There's a 40MB file of examples as well as 1.2 Mb of C source code which includes the converter. Currently this is Linux only but I expect Windows along soon.
- Link to Linux C Code Library