A tag cloud is a navigation system which uses a set of keywords in different sizes, weights or colors. It gives your online users the big picture about the focus or contents of your Website. If you take a look at the tag cloud of productivity site Lifehack.org below, you can quickly spot that its thrusts are on productivity, communication, management and software.
Contrary to misconceptions, it is not created to replace your regular navigation system or categories but basically works as a support system to help online users visualize the contents of your site.
Tag clouds are commonly used on user-generated or Web 2.0 logos like Flickr, Hubpages, Technorati and many more. It does not mean though you cannot use it in your online business. Moreover, it provides added benefits which may prove useful to business owners. It can help you monitor the community trends, foster community participation and improve searching.
There are different types of tags. Commonly, it is arranged alphabetically with more emphasis on size or color on the commonly used tags. Others are using it according to frequency of usage or relative importance. In some cases, tag clouds are arranged based on the similarities of keywords.