Kindle with Special Offers offers ads with reduced price
In exchange for viewing the advertising, Amazon will discount the Kindle by $25 making the device only $114. So if your looking to save some cash and can put up with a few ads here and there it might be worth it.
To help sweeten the deal Amazon announced that some of the initial ads will be a $20 Amazon gift card for $10 or a full-length album from the Amazon MP3 store for a dollar. Besides featuring Amazon products, Olay and Visa already on board to promote on the new Kindle.
Amazon is attempting to make the promotions more tolerable to users and more effective by making companies have to “win” a set comparisons picked by amazon customers before they can appear as a screensaver. Users will also be allowed to set personal preferences for the screensavers that appear on their device. While they won’t be allowed to pick particular companies, they can decide on the themes, or appearance, of the screensavers.
Even though the advertising concept has potential, it may take some time for Amazon to get any real data on if this pricing model works. If the initial experiment takes with users then I can see Amazon making the ad-supported version drop to the $99 price point to really try to drive a nail into the competition.