Overall the reception to WebP that I've seen so far has been pretty negative. Jason Garrett-Glaser wrote a popular review, but there have been similar response from others like Charles Bloom. Since these reviews, the WebP encoder has improved on the example used by Jason (old vs. new) but it's still not a lot better than a decent JPEG encoding. I also have a couple of thoughts on the format that I'd like to share.
Google claims it's better than JPEG but this study has some problems and as a result, isn't very convincing (Update: Google has a new study that's better). First, they recompress existing JPEG's. This is unconventional. Perhaps recompressing JPEG's is their target market, but I find that a little weird and it should at least be explained in the study. Second, they use PSNR as a comparison metric. This is even more confusing. PSNR has, for a while now, been accepted as a poor measure of visual quality and I can't understand why Google continues to use it. I think it would help the format's credibility if Google did a study that used uncompressed source images, SSIM as a metric and provided enough information about the methodology so that others could reproduce their results.
WebP also comes across as half-baked. Currently, it only supports a subset of the features that JPEG has. It lacks support for any color representation other than 4:2:0 YCrCb. JPEG supports 4:4:4 as well as other color representations like CMYK. WebP also seems to lack support for EXIF data and ICC color profiles, both of which have be come quite important for photography. Further, it has yet to include any features missing from JPEG like alpha channel support. These features can still be added, but the longer they remain unspecified, the more difficult it will be to adopt.
JPEG XR provides a good example of what features you'd want from a replacement for JPEG. It has support for an alpha channel and HDR among others. Microsoft has also put in the effort to have it formally standardized. However, it too is not without problems. The compression improvements it claims haven't matched evaluations other parties have done. I don't know enough about JPEG XR to say whether this is because the encoders are bad or because the format is not really that great.
Every image format that becomes “part of the Web platform” exacts a cost for all time: all clients have to support that format forever, and there's also a cost for authors having to choose which format is best for them. This cost is no less for WebP than any other format because progressive decoding requires using a separate library instead of reusing the existing WebM decoder. This gives additional security risk but also eliminates much of the benefit of having bitstream compatibility with WebM. It makes me wonder, why not just change the bitstream so that it's more suitable for a still image codec? Given every format has a cost, if we're going to have a new image format for the Web we really need to make it the best we can make it with today's (royalty-free) technology.
Where does that leave us? WebP gives a subset of JPEG's functionality with more modern compression techniques and no additional IP risk to those already shipping WebM. I'm really not sure it's worth adding a new image format for that. Even if WebP was a clear winner in compression, large image hosts don't seem to care that much about image size. Flickr compresses their images at libjpeg quality of 96 and Facebook at 85: both quite a bit higher than the recommended 75 for “very good quality”. Neither of them optimize the huffman tables, which gives a lossless 4–7% improvement in size. Further, switching to progressive JPEG gives an even larger improvement of 8–20%.
History has shown that adoption of image formats on the internet is slow. JPEG 2000 has mostly failed on the internet. PNG took a very long time, despite having large advantages. I expect that adoption may even be slower now than it was in the past, because there is no driving force. I would also be surprised if Microsoft adopted WebP because of their stance on WebM and their involvment in JPEG XR. Can WebP succeed without being adopted by all of the major web browsers? It's hard to say, but it wouldn't be easy. Personally, I'd rather the effort being spent on WebP be spent on a improved JPEG encoder or even an improved JPEG XR encoder.
Is JPEG still great? No. Is there a great replacement for it? It doesn't feel like we're there yet.