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updated 11/6/2007 1:42:24 PM ET 2007-11-06T18:42:24

Microsoft Corp. said Tuesday it will build a $500 million data center in Ireland to boost its services for tens of millions of customers, chiefly in Europe.

(MSNBC is a joint Microsoft - NBC Universal venture.)

Microsoft said the 550,000-square-foot center, scheduled to open in mid-2009, will house tens of thousands of servers. These will be used to power Microsoft's Windows Live-branded products, including search engines, e-mail accounts and photo-storage facilities.

John Mangelaars, vice president of the Microsoft Online Services Group for Europe, Africa and the Middle East, said the principal goal was to improve download speed and storage capacity. He said Microsoft had 150 million account holders in his regions of responsibility, chiefly in Europe, and expected to double that customer base within the next few years.

"We always need to be improving of capacity as we attract more users, because people are always storing more things, bigger things. They get spoiled, because what is great in load time today is slow tomorrow," Mangelaars told The Associated Press.

The Dublin facility will be Microsoft's third massive data-storage and search-processing warehouse and the first outside the United States. The first in Quincy, Wash., opened in April. A second, in San Antonio, Texas., is under construction.

Microsoft employs more than 1,200 people at three campuses in Ireland, its major European base. The new data center will be constructed at the Grange Castle Business Park in southwest suburban Dublin, near existing plants for drug makers Wyeth of the United States and Takeda Chemical Industries Ltd. of Japan.

Microsoft Ireland's managing director, Joe Macri, said the data center would employ an additional 15 to 20 people, reflecting the high level of automation involved, while subcontracts would employ five to six times as many people. He said construction would employ 800.

Prime Minister Bertie Ahern lauded Microsoft's decision as "a further example of Ireland being to the forefront when it comes to the cutting edge of technology. ... The Irish government recognizes the importance of being a competitive, innovation-driven, knowledge economy."

Ireland has boomed since the mid-1990s by promoting itself to high-technology companies seeking a low-tax, English-speaking base within the euro currency zone. Microsoft arrived before the boom, in 1985.

The government's Investment and Development Agency, which attracts foreign companies with grants and industrial land, said it sponsored Microsoft's move but declined to provide details.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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