Image Optimization for SEO
Web search bots are not smart enough to read each bit of information of an image, so as a publisher your job is to give as much information as you can to the search engines about your images. You need to keep in mind that the most of the major search engines including Google, Bing and Yahoo have their own image search engines, which are dedicated to serve the best images that are understandable by their image bots. The following are the guidelines of Google about adding image to your site.
1. First of all you need to give a descriptive name to your image file. For instance, you have an image, in .JPG format, of a specific breed of domestic cats found in china. You can write that image file name as domestic-cats-china.jpg.
2. Always use the ALT tag of an image. If your image file name is “domestic cats china” then you can write your ALT tag a bit more description than that, such as domestic cats found in China..
3. The content in the page with images provides clues to the search engines about the content of the images. So, always try to use relevant content in the page with images.
4. In your web server create separate directory for each categories of images. It is better not to stuff your default image directory with all the images of your site.
5. Use good quality images and writes the title, caption and description of each image (if you are a wordpress user, you will see this option once you upload and insert image in a post)
6. Do not use extra white spaces around your images; rather use the CSS to create some extra space around your image.

7. Choose the proper image format. For a large image with colorful artwork use 24 bit PNG. When you have option to convert the file into .JPG format without losing much of the quality of your image, you can do that in order to reduce the file size, which will make your image loading time much faster. If you sue Photoshop to edit your image, reduce the color palate from 256 to a lower level such as 32, without compromising the quality.
8. After upload your image, if you have option to mention the actual size of your image, and then mention it. It will help to load your image quickly in your web browser.
9. If possible try to create an image sitemap. This will make your images more visible in Google’s image search engine. You can either create a separate sitemap for the existing image files or you can add the image URL to your existing sitemap. If you find it difficult to manually create an image sitemap, then try to use image sitemap tools, which will generate image sitemap automatically. You can learn about image sitemap in webmaster tools.
10. Specify image width and height in order to improve the image loading time. When a web browser knows about the size of an image in a page, it can render much more quickly. When you upload image you can find option to mention height and width. Normally, you need to mention the actual size of the image. Always make sure that the width of your images does not exceed that of your posts. If you image size exceeds the post width then your browser or server need to shirk your image size, which will increase the loading and processing time.
11. Do not hesitate to use thumbnails of your image when required. It will save your image loading time.
The sole purpose of Image optimization is to improve the loading time of your webpage in order to increase user experience and make your site SEO friendly. Never sacrifice the quality of images because that is also a very important factor to your users
http://support.google.com/webmasters/bin/answer.py?hl=en&answer=114016
https://developers.google.com/speed/articles/optimizing-images
http://support.google.com/webmasters/bin/answer.py?hl=en&answer=178636

