Zip Files contain vast amounts of information that has undergone compression to reduce the amount of space that the data take up. This File Type is very popular on the Internet as an application that, for example, requires 5 megabytes of disk space can be compressed into a 2 megabyte zip file that is obviously quicker to download. An Application program called PKZIP can compress data into a zip file & extract the contents from a zip file. Zip files have a file extension of zip.