Amazon Introduces Ad Supported Kindle

Amazon had given us an indication that it was interested in introducing ads on Kindle. In 2009, we were dreaming about free ad-supported Kindles. Amazon did not come even close in its latest effort. It has released a cheaper Kindle with ads but that will set you back $114. To be clear, Amazon is not launching Kindle 4. It is just making Kindle 3 more affordable by $25.

We’re working hard to make sure that anyone who wants a Kindle can afford one…Kindle with Special Offers is the same number one bestselling Kindle – and it’s only $114.

Amazon expects to get compensated for this minor discount through sponsored screen-savers. Special offers are a part of the deal as well. At the time of this writing, Amazon is offering discounts on gift cards, audiobooks, and music albums with this new Kindle deal.

Amazon’s strategy here is curious to say the least. We are not talking about a major discount here. At the same time, those who do pick up this new Kindle will have to deal with sponsored content for the life of their device. Many experts expected Amazon to be more aggressive with its Kindle strategy, going as far as offering Kindles for free. Amazon did not even get close.

Is is possible that Amazon is having trouble bringing down the costs of manufacturing Kindles? Maybe this is just a soft launch for its new ad network only to offer a huge discount when ad-supported Kindle 4 units are released. At this point, it is not clear whether the ad-supported version of Kindle is worth bothering with (even if we count the so-called special offers). E-readers and e-books need to be cheaper. Amazon needs to step up its game.

What are your thoughts on the new Kindle? Is the deal worth the trouble?