Microsoft Corp. (NASDAQ: MSFT) will be building its fourth data center in Des Moines, Iowa at a cost of $500 million, the software maker said yesterday. The reasons give for Iowa as the site for such a large project were tax breaks as well as low energy costs. The data center will be located on a 42-acre plot of land just outside Des Moines. Fifty to 75 workers are expected at the new data center, with an average salary of $70,000 annually.

Microsoft must think adding large data centers will help its online efforts compete against Google, Inc. (NASDAQ: GOOG). Perhaps the company is right -- because right now, no company can touch Google's online search market. However, there are more Microsoft Hotmail and Yahoo! Inc. (NASDAQ: YHOO) Mail users than Google Gmail users. Google's market share lead doesn't extend into all its online product offerings, but don't think for a second that the Mountain View-based company doesn't want to steal as many users away from Microsoft's Hotmail as possible -- plus grab customers of other Microsoft online services.

The new data center will take a year to 18 months to compete, although company officials were mum on how many servers would reside there, as the company is still designing the data center. It did say that its data center servers would be contained in shipping containers instead of the standard server rack to allow more transport and setup flexibility. The state of Iowa is expected to give combined tax breaks to Ole' Softie of about $3 million per year. Not to be outdone, though, Google is building a $600 million data center just 122 miles west of Des Moines. At last, two of the largest forces in computing will be neighbors soon.