AbbreviationLike the abbreviations used in mobile phone text messages, instant messages and emails, LOLSpeak is abbreviated. Because space in image macros is limited, LOLSpeak is often highly abbreviated.
FunctionLOLSpeak apparently exists to make image macros more surprising, fun - and more shareable.
LOLSpeak sometimes acts like a cultural tag that marks the sender as part of a "cool" net-savvy in-group.
LOLSpeak represents an interesting example of an English subdialect evolving. There's an interesting thesis about the evolution of LOLSpeak.