The data on a compact disk is stored as a series of tiny almost microscopic bumps and lands, each of these represent information though no specific information is directly stored. Instead, the bump is an indicator of data that is roughly the same as "1" in binary code . A CD's bumps are so small that each one is only half a millionth of a millimeter long which is large enough for the laser to read.
They can be used as a store of data for music and in the same principal as a USB drive. However, they can sometimes take up more physical space than a USB and don' have the same amount of storage space as modern USB, also they are easily scratched and brocken.