In an online conversation, when the majority of someone's responses to you consist of them typing LOL or they use the term so often that it becomes akin to punctuation.
Yo man, check out this lolversation I had.
Tom: And I put the hat on the kid's head and called him captain.
Tom: It was a good time.
Anna: sounds like it lol
Tom: What are you doing tonight?
Anna: I'm going to a party