SAN JOSE, Calif. The accolades for the new CEO of Ask.com, the Oakland, Calif.-based search engine formerly known as Ask Jeeves, were just beginning to roll in last spring when the call came from Redmond.

Microsoft was interested in hiring Steve Berkowitz, Ask.com's chief executive, to turn around its faltering online operation. Berkowitz, 48, thought over the offer for about two weeks. He had competed against Bill Gates and Steve Ballmer in the past. Berkowitz asked himself, "Do I want to work for them?"

Berkowitz spoke with the Mercury News about why he agreed to become the senior vice president of Microsoft's online business group and how he plans to pull off the biggest turnaround of his career. An edited transcript follows.

Q: Why did you join Microsoft? In what areas did you think you could make a difference?

A: I loved what I was doing at Ask but there was just a fundamental limitation to what I would be able to accomplish there in terms of my ability to influence the industry as a whole.

I got a call from Microsoft and then went up and met with Steve and Bill. I really hadn't thought about moving. But I realized I have maybe one or two big steps inside of myself and this was a playing field I felt you can't turn down. Microsoft needs to turn around. It's got the resources to turn around. Why not give it a shot?

Q: How do you see Microsoft turning around?

A: The first thing is we start to move from an inside-out company to an outside-in company, which means putting the customer at the forefront of our thinking. As a company, historically, it's been very much a technology battle. In the case of the Internet, it's not the best technology that is always going to win but it is understanding and being willing to be flexible and move to where the consumer wants to go.

Q: Why do you say that the best technology is not going to win?

A: YouTube is a great example. YouTube is not the best technology. MySpace is not the best technology. They are adequate technologies. They are not rocket science by any stretch of the imagination. Search is a little different, where you have to have a great technology to get relevance. But there is a point now where if you blind taste-tested all the search engines, no one of them will be best on all queries.

You have to deliver the basics. You have to deliver the best technology at the end of the day. But it isn't going to be what is going to get you there. Audiences go where their emotions are. They are fickle and they move. You have to create a series of technology platforms so that you can give the consumer the richest experience they want.

Q: Where does Virtual Earth fit in?

A: I think it's just the beginning of this idea that graphics are going to be an important part in how you navigate the Web. We are going to have to move from a text-based version of looking at things to a more graphical way of looking at things. When you start thinking of where Virtual Earth can take you, imagine if you are going over a museum, you can see the exhibit that is in the museum. If you hover over an apartment, you can see the dimensions of the apartment, where the apartment is located, what's the view from the apartment. You actually start to create a "wow" kind of experience that allows people to say, "This is the place I want to go." It's one piece of the puzzle. It's one piece of the experience. We have to extend some form of that experience across everything we do.

Q: What do you think of the Elastic Compute Cloud, Amazon's offer to provide low-cost computing on demand?

A: The key for Microsoft to be successful is we have to be able to offer people a similar set of experiences wherever they go and on whatever device they use. So we are going to have to find a way as an industry and as a business to find storage in the cloud. We will be there. For us it's just a question of when and how.

Q: It sounds like you are going in a similar direction?

A: We are investing heavily in data centers. We are investing heavily in storage.

Strategically, if we want to be able to give people an identity whether they are on their own PC or somebody else's or on a mobile device or someone else's device, we have to have the ability to have storage in the cloud.

Q: What are your immediate priorities?

A: From a very tactical level, it is to increase the engagement of the MSN user with all the services we provide. I call it "stop people from leaving" by creating a much better experience for them.

MSN has a huge audience base of 460 million-plus globally. If we increase the experience of the portal, we will have more page views, we can increase our search share.

No. 2 is to develop a Live services strategy that people can understand, to separate out what we call the live services platform from the live experience itself. The live services platform is a series of services that are built that anyone can use.

Q: What will Windows Live look like to a consumer in five years?

A: It should be the entry point for people to enter the world of information in the cloud and on your device. If we've done it right, it will be the place where your social network is at. It will be the place where you go to search. It will be the place where you store your information. It will be your home. It gives you an opportunity to have a single destination that is much more broadly understood as the way you enter the world on the Web.