Theora benefits
Theora is free
Theora comes without licensing fees. Neither commercial nor private use will make you owe money to us. The Theora specification is in the public domain, its reference implementation is open source and subject to a license which permits inclusion in proprietary commercial products. On2, which owns patents that apply to the technical foundations of Theora, granted an unrevocable free license regarding those patents.
MPEG-4, on the other hand, is covered by patents that do generate licensing costs. According to the licensing terms published by MPEG-LA MPEG-4 Part 10 (AVC) the encoder/decoder technology can cost as much as $4.25 million (2007-2008) to $5 million (2009-2010). If a particular product is only shipped as often as 100.000 times no encoder/decoder licensing costs emerge. Note, however, that to run a successful internet content business 100.000 allowed "free" software downloads are aggregated pretty fast depending on circumstances - without any guarantee that each software download generates a paying customer refinancing your future licensing costs. Even MPEG content distribution may itself generate fees.
To make matters worse every MPEG video stream needs to be coupled with MPEG audio technology, which introduces additional costs. Theora can e.g. use Vorbis, Speex or FLAC as audio codec - all of which are free and open.
Theora is suited for internet content delivery
Theora, as every member of the Ogg family, can be streamed easily. Existing solutions do exist (e.g. Icecast or Flumotion streaming server) that have a proven track record and itself are free and open.
Of course Theora also can be streamed from virtually any HTTP server, making it easy to provide static streams.
On the technological side Theora is well engineered for low-bitrate streaming. Its in-loop deblocking filter is efficient at preventing a distracting, blocky look of the encoded content. Thus perceived video quality usually degrades gracefully as bitrate decreases, which is an essential property for any video codec targeting web video.
Theora is cross-platform
Basically every major Linux distribution ships with support for Theora by default. The licensing terms of MPEG or e.g. VC-1 make those compression schemes inherently incompatible with the idea of truly free open source software. If you want to target the growing number of Linux users shipping your content as Theora is a good idea.
Apart from the Linux platform, where Theora is considered "standard", there also exist easy to install solutions for Windows and Mac OS, making authoring and consuming of Theora encoded content easy.
Theora is reliable
In contrast to proprietary codecs with no public documentation available Theora is subject of a specification which is available to everyone at any time without restrictions. The open source nature of Theora makes it very unlikely it'll simply disappear, which may happen to proprietary codecs once their developers decide to leave the codec business.