Definition:
A Bubble Chart is a multi-variable graph that is a cross between a Scatterplot and a Proportional Area Chart.
Like a Scatterplot, Bubble Charts use a Cartesian coordinate system to plot points along a grid where the X and Y axis are separate variables. However. unlike a Scatterplot, each point is assigned a label or category (either displayed alongside or on a legend). Each plotted point then represents a third variable by the area of its circle. Colours can also be used to distinguish between categories or used to represent an additional data variable. Time can be shown either by having it as a variable on one of the axis or by animating the data variables changing over time.
Bubble Charts are typically used to compare and show the relationships between categorised circles, by the use of positioning and proportions. The overall picture of Bubble Charts can be use to analyse for patterns/correlations.
Further Reading:
Book: Agile Competitors and Virtual Organization by Steven L. Goldman, Roger N. Nagel and Kenneth Preiss