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April 2011
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New $114 Ad-Supported Kindle Announced!

Amazon(NASDAQ:AMZN) has just announced the newest addition to its highly successful Kindle line… kinda!  Visitors finding themselves at Amazon.com today will be seeing an announcement for a new “Kindle(with Special Offers)” being sold at a mere $114.  While it isn’t a hardware upgrade, anything to bring down the price on the Kindle is only going to help get it out there at this point.

What we’ve got is essentially just the existing Kindle WiFi that we all know and love already.  Instead of the standard “enjoyable” screen savers of author portraits and “kindle” related facts, it will display current advertisements and deals available to users.  While there will also be a small ad box at the bottom of the home screen, it is fairly unobtrusive and will not at any time appear during the act of reading.  Overall, definitely sounding like it’s worth the $25 savings so far.  Current examples being highlighted by the pre-order site include “$10 for $20 Amazon.com Gift Card” and “$1 for an album in the Amazon MP3 Store (choose from over 1 million albums)”.

In order to make these ads less painful for people to swallow, and presumably more effective in reaching a target audience at the same time, Amazon will be opening up a service called AdMash.  AdMash will allow Kindle users to preview potential Kindle advertisements and vote on which ones they would like to see.  Those that make it through this user selection process will enter into the pool and have a chance to end up on your eReader.  The plan at present is to allow users to select certain categories that they would be more or less interested in seeing on a daily basis and weighting the displayed ads based on these expressed personal preferences.

If all goes well, for example, a user will be able to decide they really love beaches and see a lot of ads displayed across beach backgrounds.  While still theoretical at this point since nothing has gone live, I can’t really imagine that there will be any shortage of interested advertisers(depending on the pricing scheme of course, since this is a fairly unproven ad medium), so there should be room for variety.  I would even imagine that at least some people, specifically thinking about coupon enthusiasts, will be more interested in the potential for sale notifications and coupons than the existing screen savers anyway.

The implementation remains to be seen, and I’m interested in seeing how a couple things are resolves.  How does Amazon plan to guarantee that users access the Kindle’s WiFi often enough to keep the ads cycling, for example?  Also, is this planned as an international project, or will the current US-only offer stand alone?  Mostly, though, I’m curious how they will address the software issues, especially hacking.  Anybody familiar with this site knows that you’ll find the occasional way to tweak your Kindle.  This is something I think many of us take advantage from time to time.  How, then, will the ads mesh with things like the popular Kindle Screensaver Hack that users developed to get around the repetitive author portraits?  Also, assuming they have managed to find an effective way, will this mean a software update that will impair the user’s ability to play with these sorts of tweaks?  Lots of questions without answers as of yet, but I’m sure it won’t be long before we know more.

4 comments to New $114 Ad-Supported Kindle Announced!

  • oic

    if the ads only appear during screen saver time, then I don’t see an issue with it. An ad looks a lot better than pictures of dead authors anyway

  • David Lang

    I like this idea. I’d be very willing to let the screen saver be an advertisement, and the space taken on the main page isn’t enough to annoy me. They aren’t putting ads in the books, and they aren’t interrupting your reading (I would consider both of these unreasonable)

    I think that they are expecting that the convenience of getting books via wi-fi vs loading them with a USB cable is enough to let the ads get updated frequently.

    now, a $25 discount is not enough for me, but I suspect that this gives us a real idea of the cost (to amazon) of a kindle. They have said that they make it a point not to sell below cost, so I think that this basically indicates the zero margin cost of the kindle hardware.

    It would be very nice if this worked well and they increased the discount in the future.

  • jH

    I live in Spain, and I can’t buy one of the Kindle with ads! It’s only for Americans! Such a pity!

  • Luo Genie

    Everything runs on ads nowadays. Take for example the Android market apps – most of them are for free and make money on ads. Then there are all these Kindle sites – tools sending stuff (mostly RSS feeds) to Kindle devices for free (like http://www.tomykindle.com/rss) – making money on advertising (probably; there’s no ad on that tomykindle site as I’ve just noticed, but they’ll appear any day now). That’s just how the internet world looks like. Newspapers run on it for years.

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