External file objects are placeholders in the repository that allow you to reference an entity, such as a graphic or website on the internet, and access that entity through the repository as though it were stored there.
Using external file placeholders saves space in the repository and allows you to maintain your current method of labeling, tracking, and working with graphics and other entities.
Snapshot labels are effective on external file placeholders. See Snapshot Labels Support External File Placeholders.
Frequently, the icon displayed for an external file placeholder will be defined by the program on your computer that would be used to edit such a file, along with the open book decoration (shown above) pasted on the lower left corner.