DjVu format was developed by Yann LeCun, Léon Bottou, Patrick Haffner, and Paul G. Howard while working at AT&T Labs. DjVu turned out specifically useful for scanned content and is optimized to store scanned images and text.
DjVu file format is very different from PDF in how it stores text and images. While PDF stores font vector definitions and then strings with coordinates, DjVu splits image into three layers. These layers are background, foreground and mask. While background stores images and paper texture, foreground layer stores characters information. Mask layer stores information about which layer should be chosen for specific pixel.
Background layer is a color image which is compressed using wavelet based compression algorithm called IW44.
Foreground layer is stored as a mask image encoded with bi-level image compression algorithm called JB2. The key feature of JB2 algorithm is using previously compressed character information to store new characters thus avoiding compressing same characters over and over again. Background also uses masking technique based on multiscale successive projections in order not to store redundant color information where characters in foreground layer are located.
DjVu is also capable of stroing OCR layer similar to PDF. This allows indexing and searching within DjVu documents.
Even though DjVu files are similar to PDF in functionality and provide more efficient compression, PDF files still provide better quality. PDF files also provide password protection which DjVu does not. That is why PDF format became de-facto standard for internet document distribution while DjVu is only a niche product.
Lots of useful links about DjVu are available at http://www.djvu.org/resources/.
WinDJView and MacDJView are good and simple DjVu viewers available for Windows and Mac OS. You can download them at https://sourceforge.net/projects/windjview/ and https://www.macupdate.com/app/mac/20541/macdjview.
If you need to convert DvJu to PDF there are many converters available online. RecoveryTools DJVU Migrator is a tool for Windows which allows conversion of files in DjVu format to PDF, DOC, TIFF, JPG, GIF, PNG, PSD formats.
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