Amazon Selling Ad-Supported Kindle, $25 Cheaper

Sponsored Screensaver on Kindle with Special Offer

Kindle Special Offer - ads on screensaver and homescreenAre you willing to sell advertisements on your Kindle for a one-time fee of $25? Amazon bets you would. That is why it’s now selling a variant of the popular reading device at yet another reduced price at $114—$25 cheaper than its ad-free brother. Amazon calls it Kindle with Special Offer.

The only catch is the screensaver and home screen will forever be ladened with advertisements. While the ads will fill the entire screen on the screensavers, only one banner ad will be displayed on the home screen, much like those on smartphone apps.

Users can vote for upcoming screensaver ads on a soon-to- be launched website called AdMash. Two screensaver ads will be displayed side-by-side, and users will get to pick the one they find most attractive. It’s really FaceMash for ads if you saw the movie The Social Network.

The reading experience on these cheaper Kindles will not be affected as no ads will be shown on book pages. If you find it hard to justify a mere $25 savings by sacrificing an otherwise clean interface, Amazon will also drop candies occasionally right to your discounted Kindle.

By candies, I means special offers like $10 for a $20 Amazon.com Gift Card and $1 for an album in the Amazon MP3 Store.

The Kindle saw quite a few price slashes over the years, facing competition initially from the Nook reader by Barnes & Noble, and later the more capable iPad at just a slightly higher price point.

In 2008, the Kindle was going at $399 per piece. Later the same year, it went down to $359. In the summer 2009, it was further slashed to $299, then again to $259 in less than three months. In 2010, Amazon released two versions of Kindle, the Wi-Fi only selling at $139 and the 3G version at $189.

Now, Amazon’s come out with a whole new way to help subsidize the Kindle’s price. Will it go below $114 when the iPad 3 is announced next year? Maybe. Especially if Apple is bringing the e-ink-LCD hybrid display technology as shown in the newly published patent application to the iPad.

Who would want a Kindle if we can have the same reading experience on the iPad without sacrificing the usual iOS goodness? The only strength the Kindle will have by then is its almost eternal battery life and, hopefully, a price even lower than $114.

Back to the present: There are many people suggesting that a mere $25 savings for an ad-supported Kindle is a bad deal. They want the device totally free of charge.

We need to get real. Even traditional media like newspapers and magazines don’t give away free copies (okay, some do, but that’s rare). There are ads, too, on these printed media, and people are still paying for them (to some extend).

How many ad impression has to be served in order for Amazon to recover the $25 discount? I have very little idea on how mobile platform advertising works. But assuming the rates are similar to that of the Web, it will probably take forever.

Assuming a $10 eCPM (cost per 1,000 impressions), which is considered a premium rate on the Web, ads on the Kindle have to be viewed for at least 2,500 times for Amazon to make the $25 from the advertisers.

It will probably take years for any users to see so many ads on a single device.

What do you think? Will you pay $25 extra to remove the ads or save it as lunch money?

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