In this article we present a new compression method, called WLZW, which is a word-based modification of classic LZW. The modification is similar to the approach used in the HuffWord compression algorithm. The algorithm is two-phase, the compression ratio achieved is fairly good, on average 22%-20% (see ,). Moreover, the table of words, which is side product of compression, can be used to ... [Show full abstract] create full-text index, especially for dynamic text databases. Overhead of the index is good.