MOUNTAIN VIEW (California). Aug 7: Microsoft Crop., seeking closer ties with key business partners and eyeing room to expand, is strengthening its presence in Silicon Valley, reports AP.

The world's largest software company broke ground Thursday on a new campus that will consolidate several San Francisco Bay area offices. Building on the 32-acre site will also make Microsoft a highly visible neighbour to some of its fiercest rivals.

Microsoft's move, which had been expected, will make it easier for hundreds of Silicon Valley software developers and other high-tech companies to work with the Redmond. Wash, company.

"I Just love the idea of having this place that we can call home and bring in some of the most innovative companies in the world — and do it in their back yard.” Microsoft president Steve Ballmer told a news conference.

The company currently has about 800 employees working in several different offices in Silicon Valley. The new satellite campus, expected to open in a year's time, will bring them together in a site near US High-wty Ui I and offer a liMor software development.

1' The ifcw campus also underscores the increasing importance of the region, despite the growth of the high-tech industry throughout the country, an industry analyst said.

“It re-emphasises how important Silicon Valley is in the world of technolo^ — even to a Microsoft." said Tim Bajarin. president of Creative Strategies Research Inc. in Campbell. California. "For them to maneuver the digital waters in the future, they need a stronger presence in Silicon Valley."

Microsoft's campus is in the same town as that of Netscape Communications Inc. The two companies have competing Internet browsers and computer network sunware.

Mountain View also is where Microsoft rival and critic Sun Microsystems has much of its operations. The company, based in neighbouring Palo Alto, produces the Java computer language that could threaten the dominance of Microsoft's Windows operating software.

Sun and Microsoft are involved in a federal lawsuit over changes Microsoft made to the version of Java it licenses from Sun.

Ballmer, in response to a question, wasn't concerned that competitors might regard Microsoft's new satellite campus as a case of a bully moving into the neighbourhood.