Vorbis is an open source patent-free audio compression format, developed as a replacement for proprietary digital audio encoding formats, such as MP3, VQF, and AAC. The Xiph.Org Foundation maintains and oversees Vorbis and Ogg, the container format that Vorbis usually uses. The format is commonly referred to as Ogg Vorbis.
Vorbis files (.ogg extension) compress to a smaller size than MP3 files, which reduces bandwidth and storage requirements. According to many reports, a Vorbis file provides better sound quality than a file of the same size in MP3.
Chris Montgomery started the Vorbis project at MIT, but was motivated to make the format available after the MP3 codec (coder/decoder) developers, the Fraunhofer-Gesellshaft Institute, announced that they intended to seek remuneration not only for licensing MP3 encoders, but for any stream carrying an MP3 file. Because this action could put many small and/or independent Web casters out of business, Montgomery was motivated to make the free MP3 alternative available as quickly as possible.
The Ogg part of the name came from the network game Netrek. In Netrek, an Ogg is a tactical maneuver, and the word has entered broader usage to mean "doing something forcefully, perhaps without due consideration of possible consequences." The Vorbis part of the name came from a character in the book Small Gods by Terry Pratchett.