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Acronyms, initialisms, and alphabetisms are all words that are formed by combining initial letters or parts of other words for the sake of brevity. For example, many people prefer to say “amphetamine” rather than “alpha-methyl-phenethylamine,” because the first word is much easier to remember, say, and write. The difference between these three word forms is that acronyms are designed to be pronounced, while initialisms and alphabetisms are created without regard to pronunciation.
An acronym can be made from the initial letters of words in a phrase, as in the case of the North Atlantic Treaty Organization (NATO), or it can be made from parts of words in a phrase, like with RAdio Detection And Ranging (radar). These terms are arranged in such a way that they can be pronounced without needing to spell out the letters. Some other well-known examples include AIDS, Gestapo, scuba, and laser. In some cases, companies design an acronym so that it spells a meaningful word, as in the case of the AIDS Coalition to Unleash Power (ACT UP).
When an initialism is created, it usually cannot be pronounced, forcing people to spell the letters out, as in the case of United States Air Force (USAF) and the World Trade Organization (WTO). Sometimes, people will adopt shortcuts when spelling these terms out, as in the case of the NAACP, which many people in the United States pronounce as “en double-A cee pee.” Initialisms are also sometimes known as alphabetisms, referencing the idea that people spell out the letters of the alphabet rather than saying a word.
Sometimes, an acronym and an initialism come together in a strange hybrid, as in the case of the JPEG, often pronounced “jay peg,” or the San Francisco Museum of Modern Art (SFMOMA), which is usually pronounced “es ef moma.” There is some dispute about what to call these hybrids, since they blend characteristics of both types of abbreviation.
Companies and organizations are usually very careful when they create a new acronym. They generally need to think about whether or not they want to make a pronounceable word, and how people might pronounce the word without any guidance or cues. Most also try to avoid accidentally spelling something unsavory, while some deliberately play with bad language, as in the case of the French Connection United Kingdom, a company with an initialism that results in a spoonerism that closely resembles a curse word.