Google is to create 500 jobs at its Dublin offices over the next 12 to 18 months, it was announced yesterday.

The new jobs will bring the numbers employed at Google Ireland to approximately 1,300, said John Herlihy, European director of online sales and operations.

The Google Ireland operation in Dublin serves customers in more than 35 countries in their local time zones and languages. It services Google's operations from here to the Urals and from Iceland to South Africa.

Mr Herlihy said Dublin is the second-largest Google operation globally, with the largest in Mountain View, California and with centres in India and New York coming after Dublin. Google Ireland was established in 2003.

He said the rapid growth of Google was predominantly driven by the rate of growth in online advertising.

The new jobs will be in the areas of sales, customer support, IT and management. Mr Herlihy said that as technology pushes deeper into eastern Europe, greater numbers of eastern Europeans will be needed in the Dublin operation.

"We want people with a desire to solve complex problems," Mr Herlihy said when asked what sort of employees were being sought. He said the salaries would range between €30,000-plus and "six-figure plus".

Minister for Enterprise, Trade and Employment Micheál Martin said the fact that the largest Google operation outside the US was in Ireland sent out a positive signal. The latest jobs announcement "is an excellent example of the success being achieved by the Government's policy and IDA Ireland's strategy for the development of Ireland's digital media sector", he said.

Mr Herlihy said Google's Irish operation, which covers Europe, the Middle East and Africa, accounts for one-third of the multinational's worldwide turnover. While it has a huge turnover, profits are relatively modest due in large part to administrative and royalty payments.

Google Ireland Holdings, another Dublin-based Google company, received royalty income of €302 million from other Google companies in 2004. Royalty payments are generally not taxed under Irish intellectual property law.

No financial details for 2005 for Google Ireland Holdings are available as the company has switched its status to that of an unlimited company. Unlimited companies do not have to publish financial details.

Mr Herlihy said yesterday that the change was not aimed at reducing public knowledge of Google's tax affairs but rather to restrict the availability of information on intellectual property matters. For the same reason, he said, he would not reveal the number of people employed by Google Ireland Holdings.

He said the Republic's tax laws were a "marginal" issue in relation to Google's location here. All companies sought to reduce tax bills but a low tax rate was of no advantage if a company was not making profits, he said.

Mr Martin said it was no secret that corporation tax rates were an important part of the Irish economic model "but tax on its own doesn't work. If you don't have the other ingredients, it becomes pointless."