Ad-Supported Amazon Kindle Coming for $114

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Amazon’s Kindle e-reader is getting another price cut, but only if you’re willing to look at advertisements.

The ad-supported Kindle with Wi-Fi will cost $114 when it ships on May 3. That’s $25 cheaper than the existing Kindle with Wi-Fi, and $75 cheaper than the Kindle 3G. The Kindle With Special Offers, as it is formally known, is available for pre-order now.

Ads will appear as screensavers that occupy the entire display, and as banner ads at the bottom of the main menu. They will not be inserted into e-books, so the actual reading experience will remain ad-free. Buick, Chase, Olay and Visa are signed on as launch partners.

In addition to regular ads, users will get special offers such as a $20 Amazon gift card for $10, a $1 album from the Amazon MP3 store and 50 percent off Roku’s streaming video player.

To improve the ad experience, Amazon has created a Kindle app and will soon launch a website, both called AdMash. They’ll present users with a choice of two sponsored screen savers, and the favorite of the two will end up becoming a screensaver for all users on the ad-supported Kindle. Users can also go the Manage Your Kindle page on Amazon.com and specify the kind of screensavers they’d prefer to see. Obviously, the ads can’t be removed or shown less frequently.

Ad-supported software is fairly common, especially with smartphone apps, but I can’t recall the last time I’ve seen hardware that lets consumers defray the cost with ads. It’ll be interesting to see how this turns out, but then again, Amazon is notorious for keeping its Kindle sales figures secret. Instead, we’ll figure out how this experiment is faring as advertisers flock to or flee from the platform.

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