It's an expression of extreme amusement or laughter, often used in online chats and social media. The asterisk is a placeholder for a word that is considered inappropriate or offensive in many contexts.
The "o" at the end is used to emphasize the intensity of the laughter.
Here are some other variations of the acronym:
* Lmao - Laughing My A** Off
* Lmfao - Laughing My Fking A Off
* Lmaooo - Laughing My A** Off (with extra emphasis)
While these acronyms are commonly used, keep in mind that they can be considered offensive or unprofessional in formal settings. It's always best to use more formal language in those situations.