New Kindle $25 Less, but with Ads

Amazon's experiment with on-screen advertising for the Kindle e-Reader appears to have paid off. The cut-price edition of the device is now the best-selling product in the company's entire electronics range.

Kindle with 'Special Offers' Saves $25

The model, known as Kindle with Special Offers, retails for $114, which is $25 off the standard price. As far as the hardware goes, it's exactly the same as the standard WiFi edition, which was previously the cheapest in the Kindle range. (Source: pcworld.com)

The big difference is two sets of advertising. The first is that when the device isn't in use, the screensaver now displays a range of advertisements. Amazon says it is taking a range of steps to make the ads as consumer-friendly as possible.

Ads Face Head-to-Head Challenge

To achieve this, all prospective advertisements are displayed on a free Kindle app (with a website to follow) that allows people to see a pair of ads and click on the one they like the best. Only advertisements that score a particular percentage of head-to-head "wins" qualify to be displayed on the Kindle.

Individual Kindle users can also tweak the type of screensavers they see. This doesn't mean controlling the specific brands that appear, but rather the type of imagery, such as pictures of people or landscape scenery.

The second form of advertising is a series of links to special offers that appears at the bottom of the page. At the moment, these are mainly for Amazon products, such as being able to buy a digital album for a dollar, but the company is working to bring big name brands on-board.

The key to both types of advertising is that they are not visible in any way while the user is actively reading a book. (Source: amazon.com)

Kindle Already A Freebie In UK

This isn't the only form of subsidized Kindle deal on offer: one cellphone company in the United Kingdom gives away Amazon's Kindle free-of-charge for people who buy a new phone and sign up to a service plan.

Amazon has been tight-lipped about its plans to expand or refine the U.S. pricing experiment. It wouldn't be at all surprising to see it find a way to squeeze margins a little more to get the ad-supported model down to $99, which may help drive more impulse buys.