WinZip purchased by turnaround specialist

Is it possible to make money off a product that millions have downloaded for free? The new owners of WinZip Computing hope so.

WinZip, which specializes in software that compresses large files for storage or mailing, has been bought by turnaround investor Vector Capital.

For years, WinZip's eponymous utility has been one of the most popular shareware programs on the Web. More than 140 million people have downloaded the program, and it's downloaded for free about 500,000 times a week, said Chris Nicholson, a partner at Vector.

Technically, WinZip charges $29 for the program after a 30-day free trial. Unfortunately, the honor system doesn't work as well as it used to. Few customers end up paying for the program.

The company also has never charged for upgrades or new versions, a common practice in the software world. And it has not added extra features for customers that paid the $29 licensing fee.

"There was little emphasis on monetizing what they had," Nicholson said.

Vector will try to change that by reminding users a little more firmly that the software costs money, as well as likely coming out with features that only paying customers can download. Vector also signed a marketing and distribution agreement with Google.

But Nicholson added, "We don't want to be heavy-handed about it."

If anything, Vector has shown that software companies that have been around the block can mount a comeback. The group bought Corel, which lost millions trying to latch on to the next big thing, in 2003. Vector took Corel private, streamlined its product lines and even got a new CEO.

"Corel is making money now. It is very, very profitable," he said. Corel, in fact, last year acquired Jasc Software, which makes Paint Shop. Jasc was also owned by Vector.

"We're not looking to have our investment dollars spent on R&D or building a market," Nicholson said. "We are buying companies that have a customer base."

Terms of the deal, which was concluded earlier but is only being revealed now, were not disclosed.

[ballssalty]

Boy did they waste their money

Most people are not going to pony up for WinZip. Zip is built into the Windows file system now. If anyone is going to spend money on a compression utility they'll buy WinRAR. Much more versatile and supports a variety of different compression formats. <br /><br />I can't believe they think demanding money from freeloaders is going to work. <br /><br />They may know how to turn around a company that had PAYING CUSTOMERS, but they've got no chance with a company thats customers are freeloaders. Espcially with a utility that is widely available for free with your operating system.

Or Winace

Winace has a better compression than winrar but at a lower speed. Anyhow compression is more of an issue than speed. Also why purchase it since you got GNU zip if you're so desperate after zip.

[katyggls]

Pay for WinZip? WHY?

This is laughable. Why would anyone pay for WinZip? Number one, if you have Windows XP, you don't even need it to unzip files. Number two, there are hundreds of freeware applications that do everything WinZip does, if not better. I wish Vector good luck with this endeavor.

[Mendz]

WinZip is a brand

Vector invests on existing brands with a customer base who are potentially profitable.<br /><br />Although WinXP has a built-in zip compression tool, it is not as fast as WinZip. I guess the biggest WinZip mistake is that they did not make the product secure enough to really stop working after the trial period.<br /><br />Though risky, the brand is real. Depending on how Vector "markets" WinZip, I bet they'll still make money out of it.

[quasarstrider]

Even if it is a brand, you cannot sell useless software for long

WinZip is obsolete. Windows XP decompresses ZIP files natively, and there are plenty of better 3rd party file compression utilities which support more formats and are as easy or easier to use. Some do not even have nag screens. Either they improve their product or it will not sell.<br /><br />Unlocking more features for paying customers is a fine way to add incentive to pay, but for that you need to have useful features to begin with.

[Atari05]

Why use one when you can use 7 ;P

www.7-zip.com<br /><br />Small and does the trick!

[challman]

true true

Been using 7zip for months. Kudos for OSS.

[M A]

Pay for upgrades?

I'm actually more likely to buy software if I don't need to pay for upgrades, which is why I use WinRAR (free upgrades!). Who wants to pay for upgrades every freaking year?<br /><br />7-Zip is OK as well (and free, can't beat that!) but not as customizable as I'd like (eg: you can't make it default to a compression format).

[201293546946733175101343322673]

Who Actually Pay for Winzip Upgrade?

I know I don't :)

An observation

Niko Mak _did_ 'monetarize' their product. They got someone to buy the whole company from them. They're probably set for life now. Good job to them!

[CMatrix]

Good Luck

"Shareware" is an anacronism of the 1980's. It doesn't work. Neither does nagware. Trialware (time or use limited software) does work very well as a purchase incentive. Those of us in the business know that. Maybe Vector will figure that out in time.<br /><br />Also, I am not sure if it was a typo but not charging for upgrades is definately not a common practice in the software world. Usually this is only done by amateurs that do not make any money.

[unknown unknown]

I would never buy Winzip

Hell I haven't had it on my computer in years. I found a free peace of software that does everything Winzip can (including AES encryption) and it supports alot more archive formats. It's call IZArc for those interested.

[Okie Rick]

R.I.P. Phil Katz

In 1990 I mailed Phil Katz $10 for his grandbreaking technological breakthrough in file compression programs - PKZip. ARC, PAK, ZOO, LZH, etc. all fell by the wayside after Phil cranked out his new version of code to better his first algorith, PKArc. The ARC folks were hounding him and PKZip was the result. This file crunching code was for DOS operating systems.<br /><br />And Phil charged nothing for it. It was free.<br /><br />WinZip owes Phil a debt of gratitude for using the 'Zip' name...if not his code.<br /><br />Charge for WinZip, ha! As long as pirateware sites have it for free or WinRar exists they'll get only a few dumb dollars.

[201293546946733175101343322673]

Huh?

So you mean people who download pirated or cracked software for free are smart? I see, so bank robbers are VERY SMART after all :)

[JoeF2]

PKZip lost in the Windows world

PKZip came out with a Windows version too late. WinZip did not steal PKZip's code, otherwise Phil Katz would have been all over them.<br />If I remember right, they got the code from an Open Source program: <a class="jive-link-external" href="http://en.wikipedia.org/wiki/Info-ZIP" target="_newWindow">http://en.wikipedia.org/wiki/Info-ZIP</a><br />I guess that the encryption functionality of WinZip is what the new owners are interested in. That's not available in Windows. Using the Rijndael algorithm was a smart move by the WinZip people.

[ChazzMatt]

missing the obvious

Not you guys, but the reporter. <br /><br />WinZip is being downloaded "500,000 times a week"? First, I doubt that very much. That would be 26 million downloads per year. Why? Windows XP has zip/unzip function built-in, as does Apple Mac OS X and even Red Hat Linux. Or do most people not know that? In XP, you right click and there it is... <br /><br />Who's downloading 26 million copies a year? There can't be that many copies of Windows 98 being installed each week... :)<br /><br />So, the obvious point the reporter failed to mention is that zipping/unzipping is now a generic free function bundled with the top most popular operating sytems.<br /><br />Therefore, I think the "500,000 per week" figure is wishful thinking or PR puffery on the part of the new owners. <br /><br />I only need a zip program for older Windows operating systems that I happen to encounter in my hobby of working on computers, and even then I refuse to use any recent versions of WinZip. It used to be a good program -- it and PKZip were the leader back in the late 90s. But, there are many free excellant programs that do a better, simpler job for what I need. <br /><br />(If for some reason you do need a zip utility, CNET's Download.com has 18 totally free offerings that work with ALL versions of Widows. Narrow the search to "free" license instead of "all" or "try for free.")<br /><br />The only reason I can figure people download and use WinZip is 1) they don't know any better -- since Window XP has zip functions built in or 2) they have an older operating system like Windows 98 -- but even then they are using WinZip because they don't know any better... :) <br /><br />Also, besides the price factor, recent versions of Win Zip are very annoying and intrusive. When you install, the first thing it tries to do is search your hard drive for all your zip folders and categorize them -- as if zip folders are the most important thing in your life and you want to know where they are at all times! (if you want to find zip files, there's the Windows search function...) And then it asks whether you want "classic" or "wizard" interface. NEITHER. I only want to use a zip utility when I encounter a zip folder -- like in a e-mail or something I have downloaded. And then I want it integrated with simple built-in functionality with my mouse right click menu to "unzip" and let me tell it where (usually onto the desktop or My Documents folder). I don't want to have to fire up some program just to zip or unzip a file. I don't need some program that tries to make my life more complicated or has pretensions of grandeur. Same if I want to zip something. Right click and "convert to zip." Yes, I know WinZip will ALSO do that (right-click functionality), but you have to get through setup to use that and they make the installation process so unnecessarily complicated for aspects of the program that I don't want and will never use. Also, did I mention it costs money and others are free?<br /><br />Now they are being sold to new owners that will try to prey upon people who don't know better....

[201293546946733175101343322673]

I Know Who

People who use public computers or students who use computers at school will have to keep downloading Winzip because the hard drives need to be wiped out once in a while :)

[PCCRomeo]

WHY PAY FOR SOMETHING WINDOWS SHOULD ALREADY CONTAIN!!

WinZip is nothing more than one company trying to make money off of something Microsoft failed to include in their OS. However, Windows XP already contains a Compressed Folder Extraction Wizard. BYE BYE WINZIP!!!!!

[201293546946733175101343322673]

Thanks for Shouting

Now would you please shut up? :)

Better alternatives

I have to agree when it comes to the free alternatives they are better than paying for winzip and the primary one i use is 7zip , but thanks to some of the posters here i will try out the others as well like tugzip and izarc. On the other hand as far as Shareware goes Winrar and Winace are far better than winzip.<br /><br />I also use Jasc Paint Shop Pro but not sure when Vector bought it because i use what is an older version (no need to upgrade) and i dont care much for Adobe products so Jasc PSP was the better choice for me.

[lorax1284]

Two Words: ZipGenius (actually, one word)

I am an owner of WinZip from way back. I use V 9 now.<br /><br />The functionality hasn't really changed much, until V10's new "explorer mode".<br /><br />I've discovered a FREE program (not shareware, but FREEWARE, as far as I can tell) called ZipGenius that gives me the Shell Integration of WinZip at $0.<br /><br />When I got a second computer, I was going to purchase another WinZip license, but when I saw that upgrades were no longer going to be free, I thought I'd look for free alternatives... I found ZipGenius, and now, I fear that license fee they got from me almost 10 years ago will be the last.

[mikeflash32]

winZIP sucks! why would anyone buy that shizz? it only does zip files! i just use winRAR and it is way better. 7-zip is rilly good too, winace is too slow. <br />On linux i have File Roller which can do prettymuch anything at all and if you need more you add on and its all free and stuff.<br />If you are looking for the best cross-platform program i would go with 7-zip though i prefer file-roller.

[ddemolet]

Having been a part of the WINZIP customer base for many years, I can say the product works, limited but works well and is the ":Branded" Name for compression technology. <br />Having been in computers, marketing and sales for over 40 years, I can say WINZIP has VERY POOR customer service, and poor response to any calls, or emails. There sales could be beeter if this was a target of improvement. They lack badly in any return communications. <br />As a member of the "Who's Who in Computers" I would remodel the entime effort of sales, Marketing and technology.