Gzip compression or (aka mod_deflate) will compress your pages and offer a smaller web page to download.  In fact, this very page you are on has gzip enabled.  Are there other benefits than just simply a smaller page to download?  I discovered unexpected benefits from enabling gzip compresssion at FantasySP and here are my results:

1. More Pageviews.  The results were more than surprising when it came to the amount of pageviews per visit.  Previously my pageviews per visit was a decent 5.00 - 6.00 for a monthly average.  This shot up to 12.00 after gzip compression was enabled, along with a few other optimizations.  These days, average page size can be around 500k for each site.  If you half that to 250k, then you certainly have a leg up on the competition.
   
   Bottom line: If you enable gzip compression, pageviews per visit will go up.
2. Bandwith Usuage.  This one is fairly straightforward, decreasing average pageload size will decrease bandwidth used.  Looking at my daily numbers, it went from roughly 1.75 - 2.00 gb to 850mb to 1gb.  Average pagesize, is around 200k or lower. (not including advertisements because they don't effect my bandwith totals on the server). 
   
   To put this into perspective, my compeition has an average pageload size of 800k to 900k.  That's right, nearly 1 meg on initial load to the site.  It's no wonder I have happy visitors who are willing to come back to my site.
   
   Bottom line: It saves you money on your bandwith bill.
3. Googlebot.  As you may already know, your website is crawled constantly by webbots such as Googlebot, Yahoo!'s slurp, and Bing Bot.  Plus many many more.  By enabling gzip compression you obviously lessen the amount of bandwith served, but what you also do is allow bots to crawl your pages faster than before.  The faster they crawl your site, the more pages per day they can index.  Below you will see the huge decrease in bytes downloaded per day.
   
   

I also want to inform people that there are many ways to optimize your server to decrease bandwith.  I highly suggest you minify your css and javascript prior to compression.  Use PageSpeed along with Firebug to help guide you through this process. It automatically gives you minified code and even optimizes your images.  So get optimizing!

My final point is about server load.  You might be thinking that my server might be suffering a huge hit in performance due to enabling gzip.  The truth is that the performance hit is basically negligible.  With 45,000 to 50,000 pageviews per day, server load is around .20 to .35 during peak times.  Apache is at .00701% CPU load currently.

For my next blog post I will demonstrate how to enable gzip compression in Apache, how to test it, and how to config your .htaccess file.