If i download a custom font and use it to write text on my website, what happens if a person visits my website and doesn't have this font installed on their PC? Will their PC convert my custom font into a font their PC can read?
To answer a bit more directly, they will not see your font. The browser can only display fonts that are installed on the system (by default, anyway), so it will be substituted for something similar...if you're lucky. The results are often disappointing, however.
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There are many different services out there to deal with custom fonts in browsers some include sIFR, Typeface-js, Cufon, Facelift & PIR. However they all have there downsides. I would suggest Typeface-js I use it all the time on websites i create and works very well for me.