I think it has been related to caching concept but don’t know how is it used.
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You can read about page output caching on MSDN: http://msdn.microsoft.com/en-us/library/ms178597.aspx
The directive allows you to specify settings such as whether a page should have its output cached, for how long, and other configuration options.
Output caching can be a performance benefit to a page that is expensive to run. Once it is cached, future requests will be served from the cache without the page having to run again.