Steve Wilhite created the Graphics Interchange Format, or GIF, while working for Compuserve in 1987. On Tuesday, he received a Webby Award for it and delivered his five-word acceptance speech (that's all the Webbys allow) by flashing a GIF on the big screens at the Cipriani Wall Street in New York.
The Graphics Interchange Format(better known by its acronym GIF /ˈdʒɪf/ or /ˈɡɪf/) is a bitmap image format that was introduced by CompuServe in 1987[1] and has since come into widespread usage on the World Wide Web due to its wide support and portability.
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An alternative pronunciation with a hard "G" (/ˈɡɪf/ as in "graphics" like it stands for) is in widespread usage.[8] The American Heritage Dictionary[9] cites both, acknowledging "jif" as the primary pronunciation, while the OED[10] and the Cambridge Dictionary of American English[11] offer only the /ˈɡɪf/ pronunciation. Merriam-Webster's Collegiate Dictionary[12] cites both pronunciations, but places "gif" in the default position ("\ˈgif, ˈjif\"). The New Oxford American Dictionary gives only "jif" in its 2nd edition[13] but updated it to "jif, gif" in its 3rd edition.[14]
It's pronounced "jif" in standard terms - you can't apply the rules or pronunciation of the original term to the contraction when you don't normally pronounce a contraction as its own "word" anyway. The "correct" way to "technically" pronounce it is by individually pronouncing each letter - and coincidentally, the letter G has a "j" sound in its pronunciation.
Either "jif" or "gif" is technically acceptable, but the former is NOT incorrect.
