>> live from pier three in san francisco, welcome to bloomberg west, where we cover innovation, technology and the future of business. i'm emily chang. apple reportedly hits the robot and on its new content delivery network will with a portion available in the united states and europe. his means apple can control virtually every aspect of the user experience and will no longer have to rely on third parties to deliver content. the death toll from the ebola outbreak in west africa has grown to 887. a second american infected with the virus is expected to arrive in atlanta tomorrow. we speak with a health expert about how technology can track

and treat the virus. microsoft is applying surface tablets to nfl coaches for the upcoming season. they'll have limited features to prevent cheating. the tablet belonging to the bills coach did not work for half of last night's preseason game. to the lead story of the day, apple takes a major step toward controlling the user experience and is spending tens of billions of dollars to build its own network, its own internet act bone. a new report says a small portion of the delivery network has gone live in the u.s. and europe. apple has reportedly struck deals allowing apple to deliver content like ios up eight to wreck lead to consumers. this means the content can be delivered at faster speeds and without relying on technology from third-party companies. our editor at large, cory

johnson, is with me in the studio and we are joined by an analyst who wrote this report. you point out a trace route showing os x downloads are going directly from apple to the comcast network. describe why you believe this is happening. but like a lot of large companies, apple decided to the old their own because they need to take more control with their distributor. for most content owners, does not make sense to get into the business because from an economic standpoint they are not large enough. apple has a lot of devices on the market and a lot of different software, downloads and streaming as well all stop if you think of ios updates and apps, things from updates -- right now they are only doing a small portion of their delivery but they will continue to do more. >> you say this content delivery

network is potentially huge. >> it is pretty big, if you talk to some of the isps i have spoken with, they are talking about the kind of capacity apple has put in place. it's typical of a kind need to build its own cdn -- it puts in capacity it's going to need in the future. some isps have told me the traffic is passing over their network today is still pretty small, but they've put in the capacity for 10 times that for the future. apple is clearly looking at this as a long-term play as to where this is going to play into them controlling the entire ecosystem. >> some reports show apple apps are only a small percentage of the traffic until they do an up date, and then they become netflix-like. what does apple have to do to

deploy the network? what are they deploying? >> with they're doing is deploying servers but they are primarily focusing on north america right now. servers in third-party data centers -- apple controls a couple as we know and has built them out. those servers can connect to other networks and the way that is done is to make ross connection from the building to another network. sometimes you're buying transit connecting to other networks and sometimes you are doing a paid internet deal. apple in this case is doing the same thing. ask and other words, they are not laying fiber maturing on dark fiber that is already there? fax correct. they are not a backbone provider. they are buying from companies like level three, transit, ip,

voice -- a lot of network resources and putting it together to create their own network but they do not own the cable in the ground and are not laying the cable in the ground. >> when you look at the potential for this, how big a deal is this? this could come into great use when they are pushing out ios eight and the update to yosemite, but where is it going to come into play on a broader scale? >> and who is it going to come from? i went to the akamai 10k and they point out that while apple is a customer, no customers more than 10% of revenue. we know they are spending less than $150 million last year but they are spending tens of millions of dollars to get their stuff onto the web because of they are controlling this network, they could achieve cost efficiency. if it is cheaper, apple's gross margins get better.

they may be able to tailor it, tailor their servers to deliver the kind of content apple creates and that could come across faster and cleaner him and not just the stuff we know we are getting from apple like movies or music or software updates, but things we have struggled with like icloud which is the future of computing on the cloud and apple has had issues with in the past. >> if apple is controlling so many parts of the user experience, is this something other companies could do as well? >> most other companies have done it. apple is late in the game. microsoft, google, twitch, yahoo! -- a lot of these companies started going out cdn's back in 2006 and 2007. cory is absolutely right in the sense that apple has a huge advantage here because their servers are purpose built. they are built for delivering apple's content. icloud is something that has been having performance issues and is something apple wants to correct. the cdn is going to become imperative to the quality of

service they will provide to customers across all their services. >> what about apple television? this is something we have talked about for months, whether this is actually happening. could this not come into play in a big way if apple comes out with a television set or television service? >> a lot of people in the media speculate about itv but this is nothing to do with that. i don't know of any additional news or plans apple has. apple is putting this in place for software downloads for os x and they want to improve performance with icloud. i expect them to use it for radio and itunes as well. apple needs to have this just because of the size of their business today. it doesn't have anything to do with itv right now. >> what it has to do with

creating a competitor to box or dropbox westmark we know that the place apple has looked to grow in the past. this could make that more feasible. >> any services they want to roll out in the cloud down the line, they could use that. just keep in mind they are only just now rolling out, so they are only going to deliver 100% of their content overnight. microsoft and netflix have done something similar and it typically takes about 24 months. i don't think apple will ever bring 100% in-house. i still think they will rely on a small portion but they will bring most of it to the house overtime. >> your report has a lot of people talking. thank you. coming up, how technology is helping to stop the spread of the ebola virus in west africa. we will speak to an infectious

disease expert, next. ♪

>> welcome back to "bloomberg west." i'm emily chang. over 800 people have been killed in western africa during the worst case of ebola breakout on record. while there is no cure or vaccine, organizations like the world health organization have pledged millions of dollars to help stop the spread. but what is the role of technology to track and treat this deadly virus? cory johnson is still with us and joining us from pittsburgh is an infectious disease expert and member of the infectious disease society of america. dr., thank you so much for being here.

this is such an important story and one thing you were pointing out is that it is the lack of technology in west africa leading to the spread of this deadly virus. can you explain that? >> thank you for having me. it's not the lack of technology, it's just that ebola, with all its prior outbreaks going on since 1976 has been stopped using a low-tech, tried and true approach. simple public health messaging about hygiene and making protective equipment when dealing with agent is usually what stops the outbreaks. however, what happened in this outbreak as we are having a hard time getting this across where people have a missed trust of western medicine and people have a mistrust of public health and

governmental health authorities. that is what is driving the spread. >> in terms of the technology they do not have out there, isn't a problem getting the message out, the lack of the internet, the lack of phones? >> for malaria, hiv, there has been a surge in using these technologies to enhance public health messaging, to do case finding and help with medication. we are not seeing that with ebola and it may be that this area has not had that kind of public health infrastructure using that technology. it's one of the most, sing ways to stop emerging infectious diseases. we use twitter to look at who is tweeting what to understand the spread of the disease and as technology diffuses through africa, we will see these types of approaches used much more frequently. >> the very beginning of epidemiology was the advancement of john snow's tracking of cholera -- just taking a map of london and seeing where the infections happen. what is the state of the art now in tracking the epidemiological growth of this leg question mark

>> with multiple diseases, we have ways to electronically monitor them and use a medical model that will determine how the diseases spreading, determine how many people are getting infected, watching geographics by using differential equation type models as well as random models the computer generates. that is how we use technology with influenza and i know people are doing this with the ebola outbreak trying to fix the mathematical model. like i said earlier, there's a simple measure that has stopped ebola every time prior to this outbreak. >> what are those measures >> it's actually finding the case for finding individuals who are sick and isolating them. seeing who is in contact with them following the incubation time of 21 days. telling people who are treating ebola patients to wear proper equipment, gloves, eye protection, those sorts of things. when dealing with people's bodies who died from ebola, use

proper aerial practices. ebola is not very contagious. you can only get it being exposed to blood and utley fluids. unfortunately, there are very low-tech solutions to fighting it. >> to american citizens are being brought back to the united states and one is already here. can you talk about the technology keeping them in isolation in terms of the transportation and once they actually get here, what kind of technologies being used to make sure the virus does not spread? >> dr. brantley came on a specially fitted gulfstream jet with a specially fitted isolation pod in it that kept him separated from the rest of the cabin. ebola is only spread through

blood loud and bodily fluid, so most people don't have a big risk writing on and airplane unless they are exposed to bodily fluid. once they landed, he was placed in a special biocontainment unit at emory university, one of four unique places in the united states. the room is specially pressurized so it does not allow air to leak out. there are special facilities to deal with blood and bodily fluid and there's dedicated equipment so there's no cross contamination. the individuals examining him would be wearing state-of-the-art respiratory protection to avoid exposure to any aerosols that might be generated from him. but ebola is only spread a very limited fashion. a lot of it is relevant for other diseases like sars or murders, which is what these places are designed for. however he would not be getting that stuff by getting there. he has received an experimental drug that's very promising technology that involves designing molecules specifically targeted to portions of the ebola virus that will walk that and it is a very elegant solution to treating infectious

diseases. that's one of the great success stories that this drug is being used for the first time and humans have not shown any untoward effects. it's too early to tell if it's responsible for his recovery and others as well but it's going to come out as the clinical case history comes up and is discussed. >> if you had to pick one lesson from aids being applied to ebola, what is it? >> with hiv, what we have was an outbreak that went undetected since the beginning of the 1900 and really came to light in the

1970's. what i think is the biggest lesson with hiv is that it's a negative lesson -- we did not act early enough. if we would have caught hiv in the stage where it was jumping between animals and humans before it had the ability to spread between humans, we could have changed the face of the epidemic and that is what is important to note about ebola -- controlling the outbreak at its source before has the ability to gain mutations and do more damage the way hiv did. that the theme of emerging infectious disease -- tracking them from human populations to animal and not allowing them to get a foothold in the human population. that's what you see with this response in these countries in west africa. >> fascinating stuff and good to hear you are back there doing this kind of work. thank you for joining us. we will be right back with more "bloomberg west" after this quick break. ♪

>> welcome back. i'm emily chang. microsoft is teaming up with the nfl to offer tablets on the sidelines of games. it is a $400 million deal to bring the surface to the sidelines. coaches and players use them to view digital photos and same-day action, but the devices will not have video and only connect to a private in stadium wireless network. tablets at the sidelines last night during the bills and giants preseason opener. with me to discuss it is michael gorman will stop cory johnson is still here as well. apparently it did not work out so well yesterday. what happened. >> i don't know -- it just did not work for the first half. >> the buffalo bills -- it was a problem. i was in redmond spending time with the developers of this service and i ran into the guy develop and this rogue ram.

getting this technology into the hands of coaches was not as hard as they expected. they had a limitation where they had a guy with a black-and-white camera and run down copies and look at a black-and-white picture trying to figure out where the events wasn't trying to scribble on top of it. it's pretty old school. >> the nfl is looking for ways in which they can integrate technology and marketing deals. bose has struck a new deal with the nfl, so you will see them wearing it on the sidelines and it's getting new technology. but heart of it is the nfl as a business -- microsoft, we are going to partner with you. if the team decided they wanted to use apple or lenovo, the nfl would say no. >> why isn't apple jumping on this? >> there are a lot of teams that do use ipads and you read a lot how when a new player comes on, giving an ipad with the playbook, there are ways apple is in there but they are not the preferred provider here.

>> this is also highly regulated by the different leagues and colleges. there's a story in the pac-12 now where the camera was going by the background and the coaching staff in the booth and the team looked and said these guys using lap tops and they're not allowed to use them. they got censored and it's a big deal. one of the interesting things about the new surface is they've got this pen-based system not for an do the dumbest football coach in the world.

>> this allows them to tell us in real time. if you ever see peyton manning on the sidelines, he could maybe be drawing up the route he wants or the coach could put up where the defender is going to move and instead of flipping through time lapse photos, they can draw up plays and how the defense is moving on. >> how helpful is it is the big question? >> assuming that it works, i think it speeds things up incident having to flip through photos, you can swipe through and watch short clips of the video instead of still images. i think that's where you get the technology providing that. >> i'm looking forward to the first loss being attributed to that as well. that guy ran his route according to the computer. they say pete carroll, super bowl champion from the seattle seahawks -- as much as it pains 49ers fans to say it out loud, coach carol got it instantly. >> thank you you so much. we will be watching those surface tablets on the

sidelines. coming up, more "bloomberg west" after the break. ♪

>> you are watching "bloomberg west," where we focus on innovation, technology, and the future of business. of start chinese smartphone maker xiaomi was up with a 14% share of the smartphone market last quarter, growing at hundred 40% year-over-year. they knocked out samsung for the top spot. they shipped nearly 15 million smart phones in the quarter. it has been more than two weeks since fox permit interested in buying time warner. as we await more moves from both

companies, their questions out what a deal with the for the media business. we will beef halloween time warner earnings later this week. right now i want to bring in jon erlichman from l.a. who's joined by former yahoo! ceo and longtime media consultant. >> if anybody is qualified to talk about this fox and time warner deal, it is ross levinsohn. you highlighted his time and yahoo! but he has worked for both rupert murdoch and the boss at time warner. welcome back to bloomberg. we have spent the last couple of weeks getting everyone's reaction to fox's interest in time warner. what did you think? >> i'm not surprised. mr. murdoch and news corp. are incredibly aggressive. they are always looking for ways to advance the company. the thing that jumped out at me most about this if it were to go through and the thing that resonated most with me is the powerful, incredibly powerful

executive team that would be part of this combined company. i would almost say it's akin to the murderous row on the 1920's yankees. the team in place between the news corp. side with mr. murdoch and chase carey and james murdoch and peter rice and the executives who run the divisions and on the time warner side, i don't know if jeff would stay but he's an incredible executive. the folks at cnn, jeff zucker, if he were to stay, at turner and richard clapper from hbo -- just unparalleled talent in the combined company. >> it's always a big question whether everybody stays after a deal gets done. since we don't know how this is going to and yet and you have worked for both rupert murdoch and yet you guess, how will the story end? >> the one thing about news corp. and rupert is when rupert gets his sight set on something, he does everything he can to get it.

i don't think in this case, news corporation is looking for a certain price and time warner is looking for a certain price -- i don't think there will be a rationality. i think there is incredible synergies in the companies and you could run multiple studios and cable networks and use the leverage of the combined company to take some back office expense out. i think news corp. will work very hard to get the deal done it will have to be the right rice for time warner. i'm stating the obvious but the deal will have to work for both sides. probably disney is out there working and thinking about it and probably one or two others. >> as somebody who spent a lot of time in silicon valley, do you think it is possible in this

time of convergence, tech media, all is fun things, you would see them act as a white knight to time warner? >> i don't. owning content is outside the comfort zone for silicon valley. netflix and apple have really figured out how to ridge the 344 miles between silicon valley and they do a with licensing and content and building the platform that is produced mostly up there. there is a general unease about owning content in silicon valley. there is an embrace now of licensing it, but owning it, platform sent to have much utter margins in silicon valley than actually building content. i think there's a comfortable marriage now but i don't believe we are going to see the big giants in silicon valley right off a $100 or share or more for time warner. >> the business models do sometimes have overlap because everyone is going for advertising dollars. the company where you used to work, yahoo!, they ask if it's a media company or technology company. how do you think yahoo! is performing right now?

>> i don't want to sit here and monday morning order back to work marissa has done. she has invigorated the company and energized the campus. i think she has made it part of the conversation a very positive way again. when i was there, i was pretty simple about things. i looked at it as a media company with powerful technology. that could help target advertising and help people discover and communicate. i don't want to be a critic or supporter in any respect -- when i was sitting in the chair, even running the americas, it's hard to listen to a lot of the critics and experts out there,

so from my perspective, is a great company and there are great people there. it is finding its way. she was right when she came in and said it's going to be a couple of years but you've got to lock into a strategy and for me it was a media company with powerful technology. the advertising is there, the people are there, it's doing more than $4 billion in revenue and hundreds of millions in profit. you have to lock down the plans for the future in the next year or so will be very important for that company post alibaba. >> to that point, the company has said the money that comes back from the alibaba ipo, at least half will be going directly to shareholders. if you were calling the shots on how that was spent, where would you spend that money? >> hypotheticals.

my strategy was pretty clear when i was there. i would have invested more in premium content and invest in ways to monetize that content. honestly, there's no way around rationalizing the size of the company and focus. two years income he have to be focused on what that company is, how it is set up for the future, and no secret, i was aggressive looking at hulu at yahoo! and post yahoo!. i think video is part and parcel of the future and in that respect, premium video. i was pretty clear and on record where i was excited to move that company, but marissa comes from a very different background than me and she's an incredibly

product person and visionary. wherever she ends up taking a long term, the markets will judge it and the entire industry will judge it. only about 10 seconds left but in terms of what you are up to right now -- you are on board companies like zephyr media. is there a common theme here? >> i'm in rhenium content and premium video. i'm working with a lot of upstart companies -- music which is a wearable technology company, and i'm helping a big financial institution look for secondary opportunities, providing liquidity for these very rich companies out there and i think there's a big market before they go public. the common theme is creating great products and mostly technology and content. it's an incredibly vibrant time right now. >> no doubt. thanks as always for your time. ross levinsohn, former interim ceo of yahoo! joining us in los angeles.

>> a google tip leads to the arrest of a man on child pornography charges. that's next on "bloomberg west." ♪

>> welcome back to "bloomberg west." i'm emily chang. police in houston arrested a man after a tip said a man had explicit images of a child in his e-mail. authorities used that information to search the man's devices which revealed more images and text messages. while companies like google are required to report child' when they find it, they are not obligated to go one of the way to look for it. but in april, google aided its terms of services that it was automatically analyzing e-mails and stated ugly since 2006 that they're working to fight online child sexual abuse. running is to talk about this is the director of the online trust alliance. as far as you know, how far did google go and how active were they in tracking down these images and leading law enforcement to this person?

>> thank you for giving me a chance to discuss this key issue. it is hard to say exactly what google has done but google is not alone. many technology leaders including microsoft and others have created key technology that provides scanning of images. in many ways, it's a good thing and protecting users and in this case, it is helping to comply with the law and the requirements of detecting a child photography. >> how active would you say all

of these companies are in actually tracking it down question mark reporting it is one thing but going through e-mail is another. it is hard to argue that identifying child pornography is a bad thing. i guess users have a question of how far are these technology companies looking into my e-mails? >> i can tell you from my past experience at microsoft and being involved in similar technologies, it's not like someone is sitting looking for those images. there are algorithms and such that are very sophisticated that have an ability to identify images such as this. there is a process where, again, it gets escalated internally for verification. a bigger issue is consumers need to understand what the terms of use are using these technologies. at the same time, balancing that out of what are the legal requirements and what requirements service providers have today. >> the question is where you

draw the line? if looking for these kinds of images is allowed, what is the next frontier? >> i've been involved working with the department of commerce and its this island aided collection and data mining and for what purposes -- fraud detection, security purposes, surveillance purposes, that are major issues going way beyond e-mail. as more and more devices have image capabilities and image capture capabilities. >> this particular case has gotten a lot of attention but i wonder how often it's happening? you think everyone out there is using these services. does it happen more often than we know? >> i think there's also a risk of false positives. let's say there's a scenario that a newborn child and a father is holding a photograph of his infant baby. is that child per not free? surely no one would know that. but we have to make sure innocent images are not perceived and make sure no false positives can happen from that. this technology by multiple service providers -- i'm aware microsoft has other technologies and have discussed openly that they help detect this capability.

i would suggest on an ongoing basis, it's not just random if valuation. there are images that are being analyzed and in a case where they are suspect, then they are evaluated further. >> i understand you did work at microsoft for quite a long time, so you would and should know. thank you so much for joining us on such an important story today. coming up, we will have more

"bloomberg west" after the break. ♪

>> i'm emily chang and this is "bloomberg west." from strategy meetings to hiring decisions, cyber security is playing a bigger role in global corporations. what do c suite executives need to know? the department of and security is teaming up with the association of corporate rectors to provide executives with a free digital cyber security handbook that will help them understand and assess security vulnerabilities and teach employees about hackers. i'm joined by the chertoff principal, brian wright who helps c suite level executive designed cyber security strategies will stop this is part of our security 101 series. what is in this handbook? >> it is a hood handbook of the national association of corporate directors. it puts this issue at their table.

corporate directors need to realize this is an internal and external risk to their organizations. it is an internal risk because need to protect their company's intellectual property and external risk due to their perspective on the brand. we think about potential m&a other actions or engage in joint ventures -- anything connecting into your network and enterprise as a potential risk to your organization. >> i want to go through your list of tips for the c suite when it comes to cyber security. number one, improved information sharing. what do you mean by that? does everybody get all the

information? >> it is three things -- you have to be will to talk about the issue across the organization. this is to improve cyber hygiene. people need to understand basic passwords and how to protect themselves. basically be smart with their assets will stop to come it means to work with others and share information on threats, vulnerabilities and where easy potential issues you consult together as an organization. three, it means the responsibilities at the board level. it has to be communicated down from the executives themselves about the policies and procedures they want in place. >> assess motor abilities and understand critical assets. we were speaking on the break about marissa meyers, the ceo of yahoo! said she does not use a passcode on her phone. let's take a listen to that. >> i don't have a passcode on my phone. everyone is like are you crazy? i just can't do it 15 times a day. >> she's busy and has a lot of stuff on her plate but is that a big no-no? >> it is and i'm sure they have some concerns about that will stop but it adds another layer of security and it's one step that makes it that much harder for someone to gain access to

the device. >> number 3 -- prepare and practice an emergency response plan. >> plan, plan, plan. if there is an event, had you take action to make sure the event doesn't get any worse. >> what are you due? -- what are some of the things you do? >> some folks would shut down portions of the network until they could go and do a full incident response and understand what would happen. second, determine whether you have to provide disclosure to your shareholders and or the public. three, you have to think about how you run while you do the investigation so you can continue to operate and not make this whole issue. >> any examples of where a plan was act on poorly or well? >> i'm not sure if there have been enough to date. if you look at the payment system, if you look at target, some of the major breaches over

the last couple of years, i bet all of those companies wished they spend more time planning for what they would do now than they did before. that's the lesson learned for everybody. land for the most risk. cyber risk is like any other risk. >> number four, train employees, number five leverage public and private partnership. >> number four goes back to cyber hygiene. people need to be cognizant of where they login, don't use public networks, use passwords, take appropriate training courses about not clicking on suspicious links. you have to be sure you are doing your best to secure your enterprise. and you need to take advantage of these resources. even the boards themselves, get educated and speak to the government. talk to experts to understand what's happening. >> if you were to give the general c suite upgrade for how they are doing, what would it be? >> i would probably say it is a

c plus. but it's remarkably improving. even over the past 12 to 15 months, there's been a broad awareness and education of cyber security and people are realizing ignorance is not an answer and they need to be educated so they can ask smarter questions. >> i did not like getting c's, so i hope they're working on improving their grade. time now for the bwest right, where we focus on one number that tells us a lot. jon erlichman is in l.a. but cory has the bite for us. >> how about 124 million u.s. dollars? that was box's revenues. with apple launching its own content delivery network, apple is a much better position to launch a competitive product to buy, not to mention dropbox or hightail. there is opportunity for new

competition in that box category. >> everybody was worried about google killing dropbox and that didn't happen. are concerns about that overblown? ♪ >> >> amc had a product out there that it was the best on the market and google launched a competitor. it's a hot arena and it looks like providing file storage in the cloud and file of dates everywhere is a hot commodity. >> do you have your money on anyone? >> what's interesting is you seen the ceo of box who has spent a lot of time in hollywood. he interned in hollywood before starting a business trying to cultivate these relationships in music and film and television. apple has those relationships also, so it's going to be interesting to watch.

>> thank you so much and thank you all for watching this edition of "bloomberg west." remember, you can watch us streaming on your tablet, your phone, bloomberg.com, and on apple tv and amazon fire tv.

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