Google, the US firm which operates the world's most successful internet search engine, is close to agreeing a deal that would create hundreds of jobs in Dublin.
The company, which is based in California and employs more than 500 people, plans to set up a European sales, marketing and technical support centre this year.
Google also wants to locate a portion of its Web server at a European location to offer the firm greater reach for its search engine.
Last week a delegation of Google management held talks with IDA Ireland and visited several internet data centres in the Dublin area.
It is understood Google management has also visited similar centres in Zurich, Switzerland, and is expected to make a final decision on which location to invest in within a few weeks.
A decision by Google to invest in the Republic would be a major coup for the Government, which has marketed Dublin as a key European hub for e-commerce.
An IDA spokesman said last night a tough battle was being fought to bring the Google project to Dublin but he refused to give further details on the issue.
A Google spokesman also refused to comment on the negotiations. In a statement he said: "We are always looking to expand our operations to better serve Google users worldwide, but have nothing specific to announce regarding plans to locate servers in Ireland."
However, it is understood Dublin is on the shortlist of two European locations because of the comparatively cheap cost of international bandwidth and internet data hosting. It has also benefited from the availability of highly skilled technology staff, according to sources with knowledge of the data centre industry.
Several internet data centres in the Dublin area remain "mothballed" following the downturn in the dotcom boom in mid-2000. It is likely that Google could buy one of these data centres at a cheap price or sublet space at a variety of data centres that have not attracted enough customers.
Google could also buy telecoms capacity on Global Crossing's telecoms network linking the US to the Republic, giving a boost in demand to the vastly underused infrastructure. Over the past two years Google has cemented itself as the most widely used search engine. A recent survey by OneStat.com found Google had a global usage share for its search engines of 54.7 per cent.
