emoticon
     n : a representation of a facial expression (as a smile or
         frown) created by typing a sequence of characters in
         sending email; ":-( and :-) are emoticons"
Source: WordNet® 2.0

emoticon /ee-moh'ti-kon/ n. [common] An ASCII glyph used to indicate an
   emotional state in email or news. Although originally intended mostly as
   jokes, emoticons (or some other explicit humor indication) are virtually
   required under certain circumstances in high-volume text-only
   communication forums such as Usenet; the lack of verbal and visual cues
   can otherwise cause what were intended to be humorous, sarcastic,
   ironic, or otherwise non-100%-serious comments to be badly
   misinterpreted (not always even by {newbie}s), resulting in arguments
   and {flame war}s.

   Hundreds of emoticons have been proposed, but only a few are in common
   use. These include:

 :-)
       `smiley face' (for humor, laughter, friendliness,
       occasionally sarcasm)
  
 :-(
       `frowney face' (for sadness, anger, or upset)
  
 ;-)
       `half-smiley' ({ha ha only serious}); also known as
       `semi-smiley' or `winkey face'.
  
 :-/
       `wry face'
  
   (These may become more comprehensible if you tilt your head sideways,
   to the left.)

   The first two listed are by far the most frequently encountered.
   Hyphenless forms of them are common on CompuServe, GEnie, and BIX; see
   also {bixie}. On {Usenet}, `smiley' is often used as a generic term
   synonymous with {emoticon}, as well as specifically for the happy-face
   emoticon.

   It was long thought that the emoticon was invented by one Scott
   Fahlman on the CMU {bboard} systems sometime between early 1981 and
   mid-1982. He later wrote: "I wish I had saved the original post, or at
   least recorded the date for posterity, but I had no idea that I was
   starting something that would soon pollute all the world's communication
   channels." [GLS confirms that he remembers this original posting].

   There is a rival claim by one KevinMcKenzie, who seems to have
   proposed the smiley on the MsgGroup mailing list, April 12 1979. It
   seems likely these two inventions were independent.

   Note for the {newbie}: Overuse of the smiley is a mark of loserhood!
   More than one per paragraph is a fairly sure sign that you've gone over
   the line.


Source: The Jargon File