1. Laughing at someone's misfortune.
2. Laughter when not really paying attention to what somebody has said, believing said person will be satisfied with a simple response.
3. A self-satisfactory laugh, for example believing you have just made a witty statement.
Guy #2 'Oxlol at you.'
2. Guy #1 'Wow, you're never gonna believe this. I nearly fell in the road just now, nearly got run over LOL.'
Guy #2 'Oxlol.'
3. Guy #1 'Toad's Factory more like Toad's Craptory. Oxlol.'