US internet portal Yahoo is to set up its European operations headquarters in Dublin in a significant expansion of its operations in Ireland.

The move, which is being backed by IDA Ireland, will create almost 400 new jobs over five years. The activities will involve financial, web hosting and customer support.

Yahoo's senior vice president international John Marcom said the decision was influenced by a number of factors including the success of the existing operation in Dublin known as Overture Services.

He also praised the calibre and volume of graduates available in Ireland and competitive telecommunications and data centre infrastructure.

Enterprise, Trade & Employment Minister Micheal Martin described Yahoo's decision as 'an outstanding achievement' for Ireland.