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I have a transperent image image1.png that is383 x 133 px, and another background image image2.gif that is 430 x 128 px. I opened both of images in two separate tabs in Photoshop. Then I copied the image from the first tab and pasted it over the background image in the second tab.

The first image automatically sits in the middle of the second image. But when I save it and include it in my html page, the combined image looks blurred.

What am I doing wrong? is there another way to combine two images?

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Perhaps you're saving it as a low quality jpeg. – CodesInChaos Nov 23 '13 at 14:09

Your workflow is fine. When you save it out, use file>save for web and experiment with settings.

Another thing that could be causing it to appear low quality on the web is if you are displaying it at a different size than the image dimensions. Make sure you set the display width and height correctly in html/css. If the browser has to 'think' about scaling your image, you are relying on the browser to reinterpret each pixel.

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