Exploring islands is the main way of expanding land under your control in Anno Online. A newly colonised island (and indeed, Newport itself) only has 1 usable sector at the beginning. By spending coin, time and goods (or rubies), exploring allows you to fully utilise colonised islands.
Goods used in exploration come from the island where the exploration is taking place. This means that the goods must be either manufactured on the island itself, or shipped to the island from elsewhere.