it is the process of clien side state managment

we can specify like

applicatio["str"]="Value for ref";

like the above in global.asax

this is for global purpose
we can use this value in any where of our application

Application variable is a variable that is created when the
first or new user who starts the transaction it is
intialised at that time it self .
and it is used as the global purpose also.

Application variable is generally Stored in Application 
State in Application_start event in Global.asax file which 
is fired when the first Instance of Application is created 
or when first user open the Website.

Item added to the Application variable in function like 
global variable in ASP.NET Page.