Curious: How does "Save for Web" reduce the file size?

I do know HOW TO USE "Save for web" -- no questions there. I'm wanting to understand better what's going on under the hood.
When I start with say, an 8x10 JPG at 300 dpi, I understand completely how bringing that down to 72 dpi yields a much smaller file. Simple math.
What I don't understand is how the "Save for Web" function can reduce that smaller file size so drastically at the same dimensions, still 72dpi, with negligible image loss (at least at the 80% quality). Maybe it's just my amateur eyes, but for everyday casual web pages, I can discern no significant difference between the two 72dpi images. (At lower quality settings, I do see differences.)
Can anyone explain a bit more of HOW Photoshop does this? Is it simply compression? For example, is it -roughly- analogous to converting an AIF sound file as an MP3?
Thanks,
cb

Thanks, that worked. I figure there was a setting in there somewhere and was even in the right tab, but didnt think to click on that.

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