How big is the shareware software industry? By shareware, I mean
software that is free to use but which asks for voluntary donations.
Please provide best estimates, and cite sources. Also, if you can find
any relevant estimates, how many active shareware applications and
programmers are there, and how many new shareware applications come
out each year? (If data is a couple years old, that is ok.)

As you might expect, no hard data exists on this subject. It appears
that there are between 100,000 and 200,000 items of shareware in
existence. The number of shareware items released is declining:

"Today, shareware is not as popular as it has been, and there are
fewer shareware libraries in operation. However, the future is not
necessarily bleak. Many computer users have now become used to
downloading programs over the Internet, and this means many more users
have easy access to shareware. Also we may be moving away from large,
complex programs towards an age of software components that 'plug in'
to 'container' programs like World Wide Web browsers. These components
– written in for example, Sun's Java language or Microsoft's Visual
Basic – can easily be written by individuals and small companies and
could well be distributed as shareware."

Tiscali Reference
http://www.tiscali.co.uk/reference/dictionaries/computers/data/f0000185.html

"Although no one knows for sure how many shareware programs currently
exist, it's estimated that you can find more than 100,000 of them on
electronic bulletin board systems (BBSs), online services, and at
sites on the Internet, as well as from shareware distribution
companies and a few retail stores."

Virtual PaintStore
http://www.paintstore.com/archives/computers/comp0496.html 

"C:Net: This is a page that is really put together well and is
pleasing to the eye. There is a great deal of information on computing
and life in the digital age. Plus there is news and information
regarding technology as well as reviews of new products, RealAudio
clips and search through an estimated 190,000 shareware titles."

University of Massachusetts
http://www.umass.edu/rso/colegian/issues/9703/13/sections/arts&living/article8.html

"Shareware.com ( http://www.shareware.com/ )
Search the Internet for over 200,000 shareware files. Numerous
operating systems, including those of the Atari and Amiga, are
covered."

City of New Haven
http://www.cityofnewhaven.com/library/compsite.htm

"FTP SOFTWARE RESOURCES  Links to more than 200,000 shareware items."

TNL Online
http://www.tnl-online.com/whatsnew.htm  

"Lord Chaos's Home Page. Tremble in fear mortal. Access my page...if
you dare. For on my page you will find things that are very cool. Lord
Choas's super cool word contest. Lord Chaos's links to over 200,000
shareware programs."

Lone Keep Internet
http://www.lonekeep.com/lki_home/results/kw-search-92-M5.htm

"Today, you can choose from thousands of shareware applications, from
esoteric programmers' tools to full-featured word processors,
spreadsheets, and database managers. Some admittedly seem like the
primitive fruits of a college student's all-night programming binge,
but others match leading commercial products on features and ease of
use. Shareware users, by industry estimates, spend some $100 million a
year on registration fees -- a drop in the bucket compared to
mainstream software purchases. But industry experts also assume many
users go uncounted because they never pay for the software."

Business Week
http://www.businessweek.com/smallbiz/news/columns/98-09/e3567032.htm

Regarding the number of active shareware programmers:

The Association of Shareware Professionals (the largest trade
organization for independent software developers) has 1186 members,
1084 of whom are developers:

Association of Shareware Professionals
http://www.asp-shareware.org/membership/statistics.asp

"The Shareware Author Network is an association of shareware authors
from all around the world. There are more than 1700 members." (This
was as of September 1997.)

Personal Pages of Matthias Kahlert
http://www.geocities.com/SiliconValley/Pines/8031/g_orgs.htm

"The Shareware Author Index... lists over 11,000 products...
maintained by 6,000 shareware authors."

Shareware Author Index
http://mini.net/sax/

Here you'll find the Shareware Author Index's list of 6,068 shareware
authors:

Shareware Author Index
http://mini.net/cgi-bin/saxlist

I was only able to find a very vague figure on the number of shareware
items released each year:

"Each year, thousands of shareware applications are released."

Shareware Industry Awards Winners (1996)
http://home.arkansasusa.com/eroberts/files/best96/best96.html

Some interesting articles on the subject of shareware:

CNN Money
http://money.cnn.com/2003/06/18/commentary/game_over/column_gaming/

Seattle Times
http://seattletimes.nwsource.com/html/practicalmac/134424599_ptmacc23.html

Mac Opinion
http://www.macopinion.com/columns/megabyte/99/12/09/index.html

Chisel Software
http://www.chiselsoftware.com/shareware.html

PC World
http://www.pcworld.com/news/article/0,aid,92864,00.asp

NewsFactor Network
http://www.newsfactor.com/perl/story/18971.html

Paul's Picks: History of Shareware
http://paulspicks.com/history.asp

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I hope this information is useful. If anything is unclear, or if a
link does not function, please request clarification; I'll be glad to
offer further assistance before you rate my answer.

Best regards,
pinkfreud

Quick response, links to detailed websites. Thanks!