Zip is a compression format created by Phil Katz in 1989 that utilizes LZ77 algorithm and Huffman coding. Phil Katz made the Zip format open source which allowed it to become the most widely used compression format to this day.

DOS users will most likely remember the PKWare's PKZip and PKUnzip programs which were very popular until Nico Mak Computing, Inc. created WinZip which took over as the leading Microsoft Zip utility. PKWare eventually created PKZip for Windows, but WinZip already had a controlling lead. Both products are becoming less useful to the home user because Windows XP has built in Zip features.

Even though Zip is the most common compression format it fails to out perform newer formats like the proprietary RAR format.

Links - PKWare's official site. - WinZip's official site.