Microsoft invests $500 mln in Illinois data center

SEATTLE, Nov 7 (Reuters) - Microsoft Corp. (MSFT.O: Quote, Profile, Research) said on Wednesday it will invest $500 million for a new "server farm" data center in a Chicago suburb in the latest investment to enhance its Internet services business.

The 550,000-square-foot (51,100 square-metre) data center in Northlake, Illinois, comes on the heels of Tuesday's announcement that the software maker will invest an additional $500 million to build a server farm in Ireland.

Server farms are massive buildings housing tens of thousands of powerful computers and data storage systems, providing the base infrastructure upon which Microsoft can create a wide range of Web services.

From its Xbox Live online video game system to its Windows Live e-mail and instant messaging applications, Microsoft plans to include an element of Web services in every one of its business divisions.

Microsoft's capital expenditures have surged in recent years as the company invests billions of dollars in new data centers to keep pace with Web rivals Google Inc. (GOOG.O: Quote, Profile, Research) and Yahoo Inc. <YHOO.O, who are also rolling out a variety of services to engage Internet users.

Redmond, Washington-based Microsoft will lease the property from data center service provider Ascent Corp. and real estate firm The Koman Group. Ascent helped identify the location, set up some of the facility's infrastructure and develop the site.

The facility's construction is expected to be completed in April 2008. (Reporting by Daisuke Wakabayashi; Editing by Gary Hill)