A web beacon is a clear picture file used to keep track of your navigation through a single website or a series of websites. Web beacons also go by the name of web bugs and are normally used by websites that use third party traffic monitoring and tracking services. Web beacons might be used in connection with cookies to gain an understanding of how a website's users navigate through and process the content contained in that website.See how Beacons work in this slide show
One example of web beacon usage is when a company that owns a collection of websites uses beacons to track how users travel among the websites within the company's network. This information might lead them to make network browsing more efficient and easier.