CompuServe started in this file format in 1987, as a method of displaying images that could be downloaded quickly, even with the slow speeds of a traditional telephone modem. While it only allows for a 256 color palette, it is still a choice many people use today for simple web graphics. It is a lossless format, allowing for no pixels or image data to be lost in compression.
The GIF format used to be the only format that allows for transparency, until PNG came along as an improvement. For instance, when a logo created for a website is saved in another format, the white background (or whatever color background) goes along with it. If the logo will need to be used on many different pages regardless of background color and element it will need to be transparent. GIF also allows for small animations.